Zero rated class 1 secondary NICs for Apprentices aged under 25

24 August 2015

The Policy Team asked HMRC about deferment categories and multiple employments under the new zero rate changes coming into force in April 2016.


CIPP question

The NICs relief will be delivered by introducing two new National Insurance (NI) category letters. ‘H’ - standard rate contributions for Apprentices under age 25, and ‘G’ – standard rate contributions for Apprentice Mariner under age 25.

National Insurance categories for the under 21’s includes three additional categories for deferment Z, P & K. We appreciate a not-contracted out option will not be required and also appreciate that employers may not ever need to use this category for this employee group but it seems odd that there isn’t an option. Are HMRC considering maybe utilising the same deferment categories for Apprentices also?

HMRC response

It has been decided that deferment categories are not going to be introduced for Apprentices as volumes will be minimal (if any).We are currently considering what process might be put in place to deal with any exceptions which may arise.


CIPP question

What would happen if an employee has 3 jobs, but only 1 of those jobs is as an apprentice? It has been suggested to us that in this scenario the payroll system should only aggregate the 2 non apprentice jobs & deal with the 1 apprentice job separately.

If this is the case, it has been suggested that for some software developers it would require a fair amount of change to the current configuration of payroll system to manage this change in requirement. Could you clarify what would happen in this instance?

HMRC response

Apprentices will normally have a minimum of 30 working hours per week and therefore the scenario of an employee having 3 jobs with the same employer, where only one job is an apprenticeship is very unlikely. In the highly unusual circumstances such a situation did arise, and the employer cannot aggregate the earnings along with other employments, then the Reasonably Practicable test can be relied upon.


CIPP comment

Samantha Mann, CIPP Senior Policy & Research Officer says, “However unlikely the probability is, experience tells us that if it can happen then it will happen and therefore a solution to ‘if it does’ will be needed and sooner rather than later. To ensure certainty and consistency for all stakeholders, the CIPP are working to this end with HMRC.”