APPRENTICESHIP INCENTIVES FOR EMPLOYERS
HMRC has introduced a scheme to reward employers who employ new apprentices between 1 August 2020 and 31 January 2021.
This payment is in addition to the £1,000 employers already receive for hiring an apprentice who is:
- aged 16 to 18 years old
- under 25 with an education, health and care plan or has been in the care of their local authority
What you’ll get
Employers who employ a new apprentice between 1 August 2020 and 31 January 2021 will receive a payment of:
- £2,000 for apprentices aged 16 to 24
- £1,500 for apprentices aged 25 and over
This is paid to the employer in 2 equal instalments:
- 50% after the apprentice completes 90 days of their apprenticeship
- and the remaining 50% after the apprentice completes 365 days.
- To receive the full payment, the apprenticeship must last for at least one year.
HMRC will pay this money directly into your business bank account and will request these details from the employer when you apply.
What you can use the payment for
The payment is different to apprenticeship levy funds so you can spend it on anything to support your organisation’s costs.
You do not have to pay it back.
You can only apply for this payment for new apprentices who started their contract of employment between 1 August 2020 and 31 January 2021.
How to apply
You need to create an apprenticeship service account.
Once you have done this you can apply for an incentive payment after you have added new apprentices to this account.
You can also apply for the payment if you recruit apprentices who have been made redundant, as long as they’re new to your organisation and they were hired between 1 August 2020 and 31 January 2021.
If you employ an apprentice after 1st April 2019 you must pay 5% towards the cost of any training and assessing your apprentice. You need to:
- agree a payment schedule with the training provider
- pay them the 5% directly for the training
The government will pay the rest (95%) up to a funding band maximum.
The government will pay the 95% directly to the training provider.
Apprenticeships that started before 1 April 2019
You must contribute 10% towards the cost of training and assessing your apprentice and the government pays the rest (90%).
This rate continues until your apprentice completes their training.