Class 1 Employer National Insurance Contributions zero-rate for apprentices under 25

27 July 2015

The government has published a technical consultation on draft secondary legislation for the zero-rate of Class 1 employer NICs for apprentices under the age of 25. The consultation will close on 18 September 2015.

The purpose of the regulations is to define the meaning of 'relevant apprentice'. This definition will be used to determine which apprentices under the age of 25 qualify for the zero-rate of employer Class 1 NICs. The definition of apprentices will:

a. Include: government recognised apprenticeships in the UK ie those which follow government arrangements/approved frameworks. 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.

b. Exclude: apprenticeships which do not follow government approved frameworks, also known as common law, apprenticeships; and

c. Require that a ‘relevant apprentice’ is one that will have a written agreement, specifying the government recognised apprentice framework/standard, with a start and expected completion date. This will be an agreement, between the training provider, apprentice and employer and will be the evidence the employer needs to retain when applying the zero-rate of employer Class 1 NICs for an apprentice under 25.

CIPP comment

The Policy Team will be asking for member opinion over the next few weeks to help inform the CIPP’s response to this consultation.

Guidance for employers on the definition of an apprentice and more detailed guidance on how to apply the zero-rate to the earnings of a 'relevant apprentice' through the payroll from 6 April 2016 will be available in January 2016.