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Welcome IZENR (aka National Insurance Relief in Investment Zones)

Newsletter issue – September 2023

An initialism that will soon fall smoothly from our tongues is IZENR, HMRC's description of Investment Zone Employer NICs Relief. This applies in payroll systems from April 2024 and introduces 4 new category letters.

The now infamous 23 September 2022 Growth Plan introduced us to Investment Zones in England, areas to provide 'time-limited tax reliefs' and 'planning liberalisation to support employment, investment, and home ownership'. The UK Government, via Kwasi Kwarteng as Chancellor of the Exchequer,said it would work with the devolved nations on similar Zones to ensure they are delivered UK-wide.

The Growth Plan was largely scrapped by incoming Chancellor Jeremy Hunt, though Investment Zones was not. Instead, his 17 November 2022 Autumn Statement (point 3.25) announced a 'refocus' of the programme.From a payroll processing perspective, this refocus announced the new Investment Zone Upper Secondary Threshold (IZUST). Like other National Insurance 'holidays' (such as employees under 21, apprentices under 25 etc), the eligible employer will have a temporary exemption from National Insurance Contributions on the earnings of an eligible new employee.

HMRC's Policy Paper published in March 2023 confirmed how the November 2022 refocus changed things, specifically the value of the IZUST:

  • As per the Growth Plan, it was to be £50,270 per annum (the same as that applying for employers of employees under 21 on payday, veterans etc)
  • As per the Policy Paper, it isnow £25,000 per annum (the same value as the Freeport Upper Secondary Threshold (FUST))

On 09 August 2023, HMRC advised software developers of four new National Insurance category letters needed to give this relief in payroll systems from tax year 2024/25 - N, E, K and D.So that it is easy to make a comparison between letters that already exist, we present the following table:



Freeport Equivalent

Investment Zone Equivalent





Reduced rate




Over State Pension age








Eagle-eyed readers will notice that HMRC have recycled some letters used previously:

  • E was the reduced rate category letter if the employee was in a contracted-out workplace pension scheme
  • K was the deferred rate category letter if the employee was in a contracted-out workplace pension scheme
  • D was the standard rate category letter if the employee was in a contracted-out workplace pension scheme

However, the Investment Zone is more than National Insurance relief for employers. The promised tax incentives include:

  • Stamp Duty Land Tax (SDLT) relief (mirrored in Scotland and Wales)
  • Business rates reliefs
  • 100% relief for plant and machinery investment (Corporation tax) 
  • Greater Structures and Buildings Allowances (Corporation Tax and Capital Gains Tax)

So, of greatest importance is where these Investment Zones exist. On 30 June 2023, a press release stated two 'regions around Aberdeen and Glasgow' (specifically Glasgow City Region and North East of Scotland) had been designated in agreement between the UK and Scottish Governments.

At Budget 2023, a ' Methodology Note'from the Department for Levelling Up, Housing and Communities said 8 areas in England had been asked to put forward investment development proposals:

  1. Greater Manchester Mayoral Combined Authority (MCA)
  2. North East MCA (Proposed)
  3. South Yorkshire MCA (announced on 14 July 2023 as the first named Zone)
  4. West Midlands MCA
  5. Liverpool City Region MCA (announced on 26 July 2023 as the second named Zone)
  6. West Yorkshire MCA
  7. Tees Valley MCA
  8. Proposed East Midlands Mayoral Combined County Authority (MCCA)

For tax reliefs, therefore, Investment Zones are still very much an emerging picture, so keep up-to-date with our newsletters where we will publish information when we know it.

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