At the Autumn Statement in 2014 the chancellor George Osbourne announced that from April 2016, employers of apprentices under the age of 25 will no longer need to pay secondary (employer) Class 1 NICs on earnings below the Upper Earnings Limit (UEL).
The consultation exercise to define the meaning of “relevant apprentice” for the purpose of the draft regulations will be ending on the 18th September 2015. The government is committed to ensuring more people can access high quality apprenticeships which also become an alternative to university and gaining skilled employment. It is anticipated that over the next 5 years the government will deliver 3 million more apprenticeships in England and ensure the skills are what employers need.
An estimated 180,000 employers offer apprenticeships within the UK and the policy is intended to support employers to provide a high quality of apprenticeships to young people within the UK. By removing the requirement that they pay secondary Class 1 NIC’s on earnings up to UEL, for those employees. This is also a support for youth employment by making it more attractive for employers to recruit apprentices who are under the age of 25.
To read the consultation, the definition of ‘apprentice’ for the zero-rate of employer Class 1 NICs, will be of interest to employers, employers advisors, payroll agencies and training providers involved in the delivery of apprenticeship training.