Offering an apprenticeship has never looked so appealing, but before you start hiring you need to know exactly what you are getting into.
In an attempt to kickstart the post-Covid economy and reduce unemployment among young people, the March 2021 Budget saw Chancellor Rishi Sunak announce more incentives for employers to hire trainees and apprentices.
“There has never been a better time to start an apprenticeship scheme in your business. However, many of the sweeteners have a time limit, which means businesses may rush through the door before taking a good look at what is on the other side. You don’t have long to apply, but we advise you do your homework first.”
To help you, Joanne outlines below the key points employers need to consider…
Why should I hire an apprentice?
From April 1, 2021, businesses can get £3,000 for each apprentice, which is an improvement on the maximum of £2,000 you could receive under the previous scheme. It gets better, as this is on top of the £1,000 per apprentice fee that businesses already receive — so the total is actually £4,000.
Employers can use the incentive payments on anything that covers the costs of an apprentice, such as training, salary, workwear, tools or expenses. When it comes to tax and National Insurance contributions, remember that apprentices are classed as regular employees.
When should I apply?
Like many of the Government’s business schemes, there is a short window to apply. The increased payments are only for apprentices who start work from April 1 to September 30, 2021.
As the coronavirus pandemic has been rumbling on, the Government has extended many relief packages, but there is no guarantee they will do the same with apprenticeships.
What about apprentices hired in 2020?
You have until May 31, 2021 to apply for incentive payments covering any apprentices who started between August 1, 2020 and March 31, 2021. These payments will be at the previous levels of £2,000 for 16-24 years old and £1,500 for over 25s.
How do I apply?
Claims for 2021 apprentice payments are due to open on June 1, 2021. You will need to register for an apprenticeship service account which gives you access to the incentive funding, as well as advice on recruiting, training and managing apprentices.
There are a few simple steps to open an apprenticeship service account:
- Register with HMRC and submit your first payroll data
- Tell HMRC you’re hiring an apprentice
- Register using your company’s Government Gateway details
- Link your account with your training provider
- You can also invite employees to join the account.
Once you have registered and submitted the details of your apprentices, you can apply for the incentive payment.
When do payments arrive?
Incentive payments for apprenticeships come in two equal instalments, the first after 90 days of the apprenticeship is completed, once all the company and financial checks are completed. The second payment will take at least a year, so you need to plan your cash flow carefully.
Conclusion
“Offering an apprenticeship is a cost-effective way for businesses to grow their talent pool,” adds Joanne. “By investing in training an apprentice, you can create a well-rounded employee with the skills you need. You will also be doing your bit for the economy, not to mention helping a young person take their first step on the career ladder.”
If you want further advice on apprenticeships, contact Joanne Colman from OneClick Accountant at joanne.colman@oneclick.group.
