The Government incentive for apprenticeships has now been extended!
Chancellor Rishi Sunak has announced that the extended cash incentives for hiring new apprentices is now extended until the end of January.
The cash incentives were first introduced by Sunak in August 2020 and offered businesses £2,000 to take on apprentices ages 16-24, while those that employ new apprentices aged 25 and over are paid £1,500. In February, it then increased to £3,000 for all apprentices.
The incentive payments apply to employers with a workforce in England who recruit an apprentice before the end of January 2022. Proved eligibility criteria are met, there is no limit to how many incentive payments a business can claim.
Employers will be able to claim £3,000 per apprentice, regardless of age as long as these following three criteria are met:
- The apprentice must be a new employee to the business
- The apprentice must have a contract of employment starting on or before 31 January 2022
- The apprentice must not have been employed by the business within the six months prior to the contract start date
The incentives payments are separate from, and therefore now in addition to, payments that are currently available to help cover the costs associated with training a 16–18 year old apprentice, or an apprentice aged 19-24 who has previously been in care or has a Local Authority Education, Health and Care Plan.
Employers who recruit apprentices in one of those categories above will still receive £1,000 in addition to the incentive payments. This means you could be eligible to receive up to £4,000 for each new apprentice you recruit!
The payment will be made in two equal instalments, where the apprentice is still in learning at day 90 and day 365.
The incentives can be used for the following:
- Equipment and/or uniform
- Your apprentice’s travel costs
- Relevant licences
- Additional training to support continuous professional development
- Subscriptions to relevant trade journals
- Memberships fees for professional bodies / industry associations
- Staggered bonuses for your apprentice for achieving milestones within the programme
You cannot claim the incentive payment for hiring a new apprentice if:
- The payment has already been made to a different employer for the apprentice. This includes if the apprentice was made redundant and the previous employer claimed an incentive payment for hiring a new apprentice
- The apprenticeship is not being managed using the apprenticeship service
- The apprentice has had a contract of employment with you starting within 6 months prior to 1st April 2021
You should also note that employers that pay the apprenticeship levy are still able to create an account on the apprenticeship service and reserve funding to cover 95% of the cost of the apprenticeship training and assessment. Although most non-levy paying employers contribute the 5% towards the cost of their apprentices’ training and assessment, the fee is waived for the businesses with fewer than 50 employees, as long as:
- Apprentices are aged 16-18
- Apprentices aged 19-24 have previously been in care or have Local Authority Education, Health and Care Plan
So, what are the benefits of employing an apprentice?
As well as the financial advantages of hiring apprentices, there are also other key benefits to having apprentices within your workplace:
- You can teach people on the job – apprentices can develop skills unique to your business
- Apprentices are highly motivated – they applied to be an apprentice as they want to learn more about the business and industry
- You can give back to young people and the local community – increases your chances of having a loyal and dedicated workforce
If you would like to hire an apprentice or find out more information about our apprenticeship courses and the incentive scheme, please click here to contact us.