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Zero Rate Employer National Insurance for Apprentices

Author: Cliff Davidson Published: 7th June 2016 09:06

From 6 April 2016, employers may not need to pay employer Class 1 National Insurance contributions (NICs) on earnings up to the Upper Earnings Limit for apprentices under the age of 25.From 6 April 2016, employers may not need to pay employer Class 1 National Insurance contributions (NICs) on earnings up to the Upper Earnings Limit for apprentices under the age of 25.

Cliff Davidson from Towcester based CED Accountancy Services Limited bring us up to date with Class 1 National Insurance contributions

From 6 April 2016, employers may not need to pay employer Class 1 National Insurance contributions (NICs) on earnings up to the Upper Earnings Limit for apprentices under the age of 25.

The apprentice must follow an approved UK government statutory framework. It is possible to check that an apprentice is following a statutory apprenticeship by referencing the information on the Government website using the link below:

Apprentice Frameworks           

Evidence needed

If your apprentice meets the conditions above, you’ll need to have evidence to be able to apply the relief. This can be either:

  • A written agreement between you, the apprentice and a training provider in England and Wales, evidence that the apprenticeship receives government funding.
  • The written agreement must show: the government apprentice framework or standard; a start and (expected) end date for their apprenticeship scheme.
  • If the training provider hasn’t signed the written agreement, they’ll need to give you a document that shows that they’re an approved (recognised) training provider, the training your apprentice is undertaking, and any training already done.

Alternatively, in England and Wales, you can provide evidence of government funding of the apprenticeship. This could be the declaration to receive apprenticeship incentive payments, or the employer payment schedule to the provider.

You could be the employer and a trainer if you’ve been approved by the Skills Funding Agency in England, or hold a contract for the delivery of Apprenticeships in Wales.

Employees

Employees will continue to pay employee NIC’s so their entitlement to contributory social security benefits including the State Pension won’t be affected.  

Our view

Apprentices can pay for themselves within a few years and improve a company’s bottom line by boosting productivity and making companies more effective, with the initial outlay of hiring an apprentice often smaller than many companies think, thanks to government funding and the fact that they are paid a reduced wage.

Apprenticeship schemes are becoming an increasingly popular way for young people to enter the working world, allowing them to learn a trade and gain valuable on-the-job experience whilst earning a wage.

With so many short and long-term benefits to hiring an apprentice, maybe it’s time for you to hire one and realise the advantages for your own company.

If you have any questions, please do not hesitate to contact Cliff, Aled, Duncan, Suzie or Nigel on 01327 358866, or email us using cliff/aled/duncan/suzie/nigel @cedas.co.uk.

www.cedas.co.uk
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