Funding and Apprenticeship Levy

Chancellor Rishi Sunak has announced a “brand new bonus” for employers to hire apprentices over the next six months.

In addition to the existing £1,000 incentive the government already provides for new 16 to 18 year-old apprentices, and those aged under 25 with an education, health and care plan, the government will now pay an additional bonus payment of £2,000 for apprentices aged 16 to 24 and £1,500 for apprentices aged 25 and over.

Are you an organisation with a pay bill less than £3m (non-levy paying)?

The government will pay at least 95% of tuition fees for any apprentice.

You could get extra financial help, depending on how many people you employ and your apprentice’s personal circumstances.

You could get a £1,000 support payment from the government, if one of these applies for your apprentice:

• is under 19 when they start the apprenticeship
• is under 24 and a care leaver when they start the apprenticeship
• has a local authority education, health and care plan

If you employ fewer than 50 people and your apprentice is under 19 at the start of apprenticeship, the government will pay all of the tuition fees and give you the £1,000 support payment.

Plus an additional bonus payment for hiring a new apprentice between August 2020 and January 2021:

• £2,000 for new apprentices hired aged 16 to 24
• £1500 for new apprentices hired aged 25 and over

Are you an organisation with an annual pay bill of £3m+ (levy paying)?

If your apprenticeship levy pot covers the course costs, you will not need to make any additional payments. If the pot has been exhausted, the government will pay at least 95% of the fees.

You can also get a £1,000 support payment from the government, if one of these applies for your apprentice:

• is under 19 when they start the apprenticeship
• is under 25 and a care leaver when they start the apprenticeship
• has a local authority education, health and care plan

Plus an additional bonus payment for hiring a new apprentice between August 2020 and January 2021:

• £2,000 for new apprentices hired aged 16 to 24
• £1500 for new apprentices hired aged 25 and over

WAGES, NATIONAL INSURANCE AND OTHER BENEFITS

Apprentices are full-time employees. They are entitled to a wage, statutory holidays and paid time off to study.

You will need to pay a minimum starting salary of at least £12,000, although some employers pay significantly more.

If your apprentice is under 25, you do not have to pay Class 1 National Insurance contributions.