From 6 April 2016, if you employ an apprentice you may not need to pay employer Class 1 National Insurance contributions (NICs) on their earnings below £827 a week (£43,000 a year).
They must be under 25 years old and following an approved UK government statutory apprenticeship framework (frameworks can differ depending on the UK country). Employees will continue to pay the standard rate of Class 1 NICs through their salary and they won’t see any reduction in their payments!
What you need to do
In order to apply for the relief in contributions, you'll need to supply either:
- a written agreement between you, the apprentice and a training provider
- evidence that the apprenticeship receives government funding (in England and Wales)
The written agreement must show the government apprentice framework or standard as well as a start and (expected) end date for their apprenticeship scheme.
If your training provider hasn’t signed the written agreement, they’ll need to give you a document that shows 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.