15 January 2016

Good news for employers on National Insurance contributions

From 6 April 2016, employers will not be required to pay employer National Insurance contributions (NICs) for apprentices under the age of 25 on earnings up to the upper earnings limit. This is a development on a previous announcement in April 2015 that employers were exempt from employer NICs for employees under 21.

The Minister of State for Skills, Nick Boles MP, recently wrote a letter to all chairs of Further Education, Sixth Form Colleges and Colleges to inform them of the government’s plans for apprenticeship growth by 2020, which includes this new policy.

The objective of the policy is to offer young people an alternative to university and to target apprentices under 25 to improve their prospects in the market. In turn, this will reduce youth unemployment and develop skills in the workforce.

There will be additional costs to employers to update their systems in line with the new policy, but for small business especially, the benefit will outweigh the costs.