CE Back Office’s payroll geeks have some top tips for recruiting your next apprentice…
- Ensure you are using the correct NI letter code
It is important to ensure that any apprenticeships you recruit, or currently have are on the correct NI letter code. Apprentices that are under 25 years old should be on NI letter code H. This is important in terms of payroll as employers do not pay NI contributions for employees on this letter code, meaning it can reduce their national insurance bill.
You need to ensure the apprenticeship is a statutory apprenticeship (check with your training provider). You’ll also need to keep evidence to justify the relief. This includes a written agreement between the employer, apprentice and training provider. In England and Wales you will also need to demonstrate the government funding was used to fund the apprenticeship, for example the employer payment schedule from the training provider will show the government funding.
- Utilise available funding
There is apprenticeship funding available for businesses of all shapes and sizes. If the business is a non-levy paying organisation (has an annual bill of under £3 million) co-investment is available from the government. Please see below table of funding available, for levy and non-levy payers;
|Employer||Employer Pays||Government Pays||Incentive Payments|
|Employer paying apprenticeship levy||The cost of the apprenticeship from their digital account and 10% of any amount over this.||90% of any fees that the digital account does not cover.||£1000 for each 16-18 year old apprentice and 19-24 year old’s with an EHC plan.|
|Employer not paying apprenticeship levy (50+ employees)||10% of apprenticeship fees.||90% of apprenticeship training fees.||£1000 for each 16-18 year old apprentice and 19-24 year old’s with an EHC plan.|
|Employer not paying apprenticeship levy (fewer than 50 employees)||0% of apprenticeship training fees for 16-18 year old’s or 19-24 year old’s with an EHC plan. 10% of fees for other apprentices.||100% of any apprenticeship fees for 16-18 year old’s or 19-24 year old’s on an EHC plan. 90% of feeds for other apprenticeships.||£1000 for each 16-18 year old apprentice and 19-24 year old’s with an EHC plan.|
- Using your levy funds
Businesses that earn over £3 million are required to pay 0.5% of their annual bill towards the Government’s apprenticeship service. This is payed into a digital account that can be accessed by the employer to use towards apprenticeship course fees. In order to access these funds an employer must register here http://www.gov.uk/guidance/manage-apprenticeship-funds. Levy contributions expire after 24 months and cannot be offset against anything else, therefore it is important to utilise them whilst they are there. April 2019 marks the 24 month anniversary of the apprenticeship levy so don’t miss out.
- Up-skill existing staff
Take advantage of the levy funding and government co-investment to develop existing employees. As opposed to recruiting new employees and incurring costs on recruiting and training, why not put a current employee through an apprenticeship to fill the current skill gaps in the workforce? An apprenticeship for an existing employee can lead to them mastering new skills or higher level skills that are required for their job, gaining qualifications to support their development within their role.