Employers Class 1 NIC for Apprentices under 25 to be abolished

With effect from 6 April 2016, you may be interested to learn that you may no longer have to pay employer  Class 1 NICs for apprentices under the age of 25.

Currently employer Class 1 NICs are due for all employees aged 21 or over.

 

For the tax year 2016-17 it is proposed that the new NI category H will be used for apprentices who in addition to being under 25 are:

• working towards a Government recognised apprenticeship in the UK which follows a government approved framework/standard

and

• have a written agreement (between employer, apprentice and training provider), giving the government recognised apprentice framework or standard, with a start and expected completion date.

Employers NIC will be at a rate of 0% up to the new Apprentice Upper Secondary Threshold, which will be aligned with the Upper Secondary Threshold for the tax year beginning 6 April 2016.  Earnings above the Apprentice Upper Secondary Threshold (for 2015-16 £3,532 per month) will be at the full rate of 13.8%.

This does not affect the calculation of primary Class 1 NICs deducted from apprentices.

For more information see the HMRC website

Thinking of hiring an Apprentice? Here’s some advice to get you started

If you are a business the buzz around apprenticeships won’t have escaped you.  There are a lot of good news stories in circulation which show how apprenticeships are benefitting businesses, particularly SME’s, and providing young people with the opportunity to learn new skills.  Providing young people with a real route to a career through the Apprenticeship scheme is good news for everyone.

What may be less clear is how to get started if you are interested in taking on an Apprentice.

Funding

Businesses may be able claim up to 5 different grants to cover the initial costs of hiring an Apprentice, which includes £1,500 in the form of an Apprenticeship Grant for Employers of 16-24 year olds.

The funding criteria is due to change in January 2015, so you may wish to look at advice on funding via the Apprenticeships.org.uk website

General Information

An Apprenticeship normally lasts for a minimum of 13 months and can last up to four years.  This is an investment for a business but gives business owners a real opportunity to shape and develop their workforce.

It is worth noting that an Apprentice does become your employee and has full employment rights as would any other employee.

Apprenticeship schemes are facilitated through local colleges and independent training providers, and they can offer more advice and support to get you started. The Apprenticeships Website includes a search facility to help employers locate training providers depending upon the type of apprenticeship being offered.