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Abolition of employer NICs for apprentices

1 Mar 2016

1 minute read

From April 2016 employer national insurance contributions (NICs) up to the upper earnings secondary threshold (UESC) will effectively be abolished for apprentices aged under 25.

Prior to 6 April 2016, employers have been required to pay Class 1 secondary (employer) NICs at 13.8% on earnings paid to employees above the lower secondary threshold, which is set at £156 per week for 2015/16. This will be set at a zero-rate for ‘relevant’ apprentices on weekly earnings up to £827 for 2016/17.

A technical consultation with draft regulations defining a ‘relevant’ apprenticeship was issued in July 2015. The key points are as follows:

  • It will include government-recognised apprenticeships in the UK. This includes frameworks or standards recognised by the Skills Funding Agency in England as well as apprenticeship frameworks approved by the Welsh, Scottish and Northern Ireland governments
  • There will be a requirement for a relevant apprentice to have a written agreement, specifying the government-recognised apprentice framework/standard, with a start and expected completion date
  • It is intended that, where an employee is considered an apprentice for National Minimum Wage purposes, they will also be considered a ‘relevant apprentice’ for the zero-rate of employer Class 1 NICs for apprentices under 25, except where the apprentice is not following a government-approved framework/standard
  • Common law apprenticeships which do not follow government-approved frameworks will be excluded.

This change is the latest in a series of reforms to national insurance during recent years.

If you have any questions relating to national insurance, please do not hesitate to contact us on 01865 292200 or email

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