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Apprenticeship levy – National Insurance savings, incentives and more!!

Not many employers are aware that since April 2016, apprentices under the age of 25 have been exempt from employer National Insurance contributions. This can offer a significant saving for employers – just one more benefit of employing an apprentice!


Tracy is a 23 Year old trainee accountant being paid £20,000 per annum, not on an apprenticeship but studying for an Association of Accounting Technician's (AAT) qualification at a commercial training college.

If Tracy was enrolled as an Apprentice, she would gain the same qualification plus valuable skills and behaviours to help her excel in the workplace.

Employer's NIAAT Training costs
Current Cost£1,641 per annum£2,500-£5,000
Apprenticeship cost£0Paid via the Apprenticeship Levy or, for non-levy payers and those who have exceeded the funds in their Digital Apprenticeship Service account, 90% funded by the government.

Additional employer Incentives

From May 2017, employers will also be able to benefit from two additional incentives for 16-18 year olds and for 19-24 year olds who were formerly in care or who have an Education and Health Care plan.

• 16-18 Year Old Incentive
For every 16-18 year old apprentice employed as an Apprentice, the employer will receive a £1000 payment to supporting that employee through their apprenticeship. Small employers, with fewer than 50 employees, won’t pay anything at all for training 16-18 year olds.

• 19-24 formerly in care or who have an Education and Health Care plan
For every 19-24 year old apprentice employed who has formerly been in care or who has an Education and Health Care plan, the employer will receive a £1000 payment towards supporting that employee through their apprenticeship. This is a great opportunity for employers to support the social mobility agenda!

At Interserve Learning & Employment, we are specialists in the Apprenticeship Levy and the broader reforms around apprenticeships and training delivery and funding. We are already working with a number of employers to help them understand how to make the most of the reforms and reap the benefits of employing apprentices.

Using a suite of bespoke levy analysis tools, built on the back of over 25 years’ experience of delivering and managing apprenticeship programmes, our team are creating detailed levy account forecasts and helping employers to:

• Understand a forecast level of NI savings

• Understand incentive payments

• Make effective business decisions on how to make optimum use of the funds in their digital account

• Take advantage of co-funding, where the government pays 90% of training costs

With only a few months left until the levy will be applied, this is the right time develop a robust plan for deriving best value through the apprenticeship levy and investing in your current and future workforce.

We have a dedicated team of commercial analysts, project managers and curriculum experts ready to help you understand your workforce and create a bespoke plan to fully utilise the levy, understand the wider benefits of apprenticeship programmes and support your business. Get in touch for a free consultation.

Gregg Scott

Head of Commercial

0333 444 5055