Jul 1ST

NI Contributions for young apprentices abolished

The Government is committed to ensuring more people can access high quality apprenticeships which offer young people an alternative path into skilled employment.  It is now better value for employers to take on young apprentices since 6 April 2016, if you employ an apprentice under 25 years old, you will not need to pay employer Class 1 National Insurance contributions (NICs) on their earnings below £827 a week (£43,000 a year).  This measure will result in a saving of around £1,000 a year when employing an apprentice earning £16,000.

To qualify your apprentice must be following an approved UK government apprenticeship framework or standard and you must be able to provide evidence of this by providing a copy of the written agreement between you, the apprentice and the training provider.  This benefit will continue until your apprentice completes their training or turns 25 and only applies to payments which are liable for Class 1 secondary NICs.

Employees will continue to pay the standard rate of Class 1 NICs through their salary and they will not see any reduction in their payments.  Their entitlement to contributory social security benefits, including the State Pension will not be affected and neither will their entitlement to statutory payments.

Apprenticeships can add significant value with 96% of apprentice employers stating that they are beneficial to their business.  77% of employers believe that hiring apprentices makes them more competitive and 81% of employers say that they favour using a company that takes on apprentices.  If you would like to find out more about how an apprentice could help your business contact the apprenticeship team at Mouton College on apprenticeships@moulton.ac.uk or 01604 673575.