If you’re an employer in the UK, you should seriously consider taking on an apprentice. Not only is this a great way to bring new talent to your business and offer young people a great start in their career, but you could receive also receive more than £4,000 in payments from the government.
In addition to this money, there are many non-financial incentives for offering apprenticeships that could really make a big difference to your business.
In this article, we’ll explore why apprenticeships are a great opportunity for businesses of all sizes and outline the financial incentives available. We’ll also explain how to apply for these payments and provide some helpful tips along the way!
What is an Apprenticeship?
An apprenticeship is a job with training that enables someone to gain the skills and knowledge needed to do a particular job. There are apprenticeships in more than 170 industries, ranging from engineering and construction to hairdressing and childcare.
Apprentices offer both an alternative route to going to university and a great opportunity for businesses to invest in the future of their workforce. The important thing is that apprenticeships are available to people of all ages and levels of experience, so there really is something for everyone.
What are the Financial Incentives for Employers?
If you’re thinking about taking on an apprentice, you could receive up to £4,000 from the government in payments. This includes the Apprenticeship Grant for Employers which is a £1,000 payment for any apprentice you take on who is between 16 and 18 years old or is under 25 with an education, health and care plan or who has been cared for by the local authority.
In addition to this, you can also receive a £3,000 Apprenticeship Incentive Payment for an apprentice with an employment start date between 1 October 2022 and 31 January 2023 and an apprenticeship start date between 1 October 2022 and 31 March 2023.
These payments are available for businesses of all sizes, so even if you’re a small business, you could still receive up to £4000.
What Can You Use the Money For?
The money that you receive from the government can be used to cover the costs of training and assessing your apprentice. It can also be used to help with the costs of their salary, uniforms and equipment.
The money is designed to help businesses of all sizes to cover the costs of taking on an apprentice to incentivise getting more people into work. It is an excellent way to invest in the future of your workforce and your business because you will be able to train them up to do a job that is specific to your company.
How to Apply for the Payments
If you want to apply for apprentice payments, you can do so online through the government’s apprenticeship service website. To be eligible, you must be registered with HMRC and have a PAYE scheme in place for your apprentices. You will also need to provide evidence that your apprentice is employed and has an apprenticeship agreement in place. To complete the application, you will first need to create an apprenticeship service account which can be done here.
When do You Get Paid?
You will receive the £1000 payment for each eligible apprentice you take on when they start their employment with you. The £3000 payment will be paid in two instalments: 50% after the apprentice has completed ninety days of their apprenticeship and the remaining 50% after they have completed one year.
After the government has received and checked all of your documents, payments will be sent on the 14th working day of the month but it may take up to three more days until you receive the money. You can track your payments on your online application page.
What Evidence do You Need to Provide?
To receive payments, you will need to provide evidence that your apprentice is employed and has an apprenticeship agreement in place. You will also need to provide proof of ID for your apprentice, their date of birth, National Insurance number, your PAYE reference number and your bank details so that the payments can be paid into your account.
If you want to apply for the £1,000 payment, you will need to provide evidence of your apprentice’s age. This can be their passport, birth certificate or other official ID.
If your apprentice is someone who you previously took on as part of the Kickstart Scheme (see below), you will also need to provide evidence for this, including:
their Kickstart scheme grant agreement
proof of their employment start date of employment through the Kickstart scheme (usually a letter of appointment or an employment contract)
the first and last payslip they received under the scheme
proof of receipt of the scheme’s grant payment
There may be additional evidence requested if your application is selected for review. This may happen if the government needs more information to assess your application or if there is something they need to check.
The Apprentice Levy Scheme
The government’s apprentice levy scheme is designed to help businesses of all sizes to cover the costs of taking on an apprentice. The way it works is that businesses with a pay bill of £500,000 or more each year will pay 0.05% into a levy pot. This money can then be accessed by businesses to help cover the costs of taking on an apprentice.
The beauty of the levy scheme is that it incentivises businesses to take on an apprentice, without having to find the money themselves. It also means that businesses can get started with apprenticeships sooner, as they won’t have to wait for payment from the government.
How to Apply
Applications for the apprentice levy are also made through the government’s apprenticeship service website. You will need to register for an account and then you will be able to access the application form.
Again, you will need to provide some basic information about your business, such as your company name, address and VAT number. You will also need to provide your PAYE scheme reference number. Once you have submitted the form, you will receive a confirmation email and your payment will be processed within five working days.
How to Set Up PAYE for Apprentices
If you’re thinking about taking on an apprentice, you will need to set up a PAYE scheme with HMRC. This is because apprentices are classed as employees and need to be paid at least the minimum wage.
In order to set up a PAYE scheme, you will need to register with HMRC and provide them with some basic information about your business. You will also need to provide details of your apprentice’s salary and start date. Once you have registered, you will be able to access the online service and set up your PAYE scheme.
The Kickstart Scheme
The kickstart scheme is a government initiative that provides funding for employers to create new jobs for 16-24-year-olds who are on universal credit. The aim of the scheme is to help young people who are at risk of long-term unemployment to get into work.
This is an excellent scheme for businesses who are thinking about taking on an apprentice but are worried about the costs. The scheme will cover 100% of the costs of setting up the apprenticeship, as well as paying for the apprentice’s salary for 25 hours a week.
To be eligible for the scheme, businesses must be based in England, Scotland or Wales and have less than 250 employees. The jobs created must be new positions and must last for at least six months with at least 25 hours a week of work.
Non-Financial Incentives for Taking on Apprentices
There are also a number of non-financial incentives for businesses that take on an apprentice. These include:
The ability to train an apprentice in the specific skills that your business needs – This means that they will be able to hit the ground running once they start work and will be an asset to your business from day one.
A lower age limit for apprentices – The government has recently lowered the age limit for apprenticeships from 19 to 16, which means that more young people will be able to access the scheme.
The ability to trial an apprentice before you commit to taking them on full-time – This is a great way to see if an apprentice is a right fit for your business without having to make a long-term commitment.
The chance to mould an apprentice into your company culture – This is an excellent way to ensure that your values are instilled in the next generation of employees.
The opportunity to develop a long-term relationship with an apprentice – This is a great way to build loyalty and retention within your workforce.
A more motivated and productive workforce – Apprentices are eager to learn and make a contribution to the business which is always a bonus.
Improved staff morale – Apprentices can help to improve staff morale as they are a source of new energy and enthusiasm within the business.
A way to give something back to your community – This can help your business’s reputation while providing young people with an opportunity to learn and develop their skills.
Hiring an Apprentice Once their Apprenticeship is Finished