In short, if you are running an apprenticeship scheme (employing apprentices), you need to understand how much to pay them and the extra measures your payroll department should undertake.

They’re not like regular employees. They are often – though not always – younger members of your team, so have their own rights under employment law and must be accounted for slightly differently.

Apprentices vs regular employees

There are major differences between employing apprentices vs regular employees.

Apprenticeships are structured training programmes designed to provide individuals with skills and qualifications specific to their chosen industry.

You may be receiving financial incentives and Government support for hiring apprentices, which is often a bonus for your business (more on this later).

When it comes to pay, apprentices typically receive a lower minimum wage, but this increases as they progress through their training.

Regular employees, on the other hand, are hired under standard employment contracts and receive the National Minimum Wage (NMW) or higher, depending on their age and experience.

Here are the wages (per hour) you are legally obligated to maintain from 1 April 2024:

• Aged 21 or over (National Living Wage (NLW)) = £11.44
• Aged 18 to 20 (NMW) = £8.60
• Under 18 = £6.40
• Apprentice = £6.40

As you can see, an apprentice is entitled to the same pay as an individual under the age of 18 but is not entitled to the full NMW or the NLW.

Can you pay an apprentice more than the minimum?

Yes.

Often companies will do this to make their apprenticeship scheme more competitive and to promote loyalty amongst their workers.

So long as their wage is £6.40 per hour, or above, you are within your right to pay your apprentice as much or as little as you like.

How does payroll differ for apprentices?

Your requirements under payroll differ slightly from when dealing with regular employees.

At first, the apprentice is entitled to the apprentice wage (£6.40), but this increases when the apprentice has completed their first year and is over the age of 19.

At this point, they are entitled to either the NMW (between 19 and 20 years old) or the NLW (21 and over).

So, if you are employing an older apprentice, this is something to consider.

If you are employing an apprentice you will need to establish a formal apprenticeship agreement with apprentices, outlining the terms and conditions of their training.

This is separate from the standard employment contract.

Additionally, apprentices are required to dedicate a portion of their time to off-the-job training or education, which the employer must facilitate and cover the costs for.

Larger employers may be subject to the Apprenticeship Levy, contributing to the funding of apprenticeship training nationwide.

What does the Government say about apprenticeships?

The Government states that apprenticeships must last at least a year but can take up to five years depending on the level being studied.

You are responsible for ensuring your apprentice(s) learns ‘job-specific’ skills, gets time off during their working week to complete out-of-work training, and that they work with an experienced staff member.

The Government does offer financial support for apprenticeship training.

You may be eligible for payments of £1,000 based on the apprentice that you hire.

The amount of funding you can receive depends on whether your business is subject to the Apprenticeship Levy or not.

If you don’t pay the Apprenticeship Levy, you must contribute five per cent towards training costs, agree on a payment schedule with the training provider, and pay them directly for training.

The Government covers the remaining 95 per cent, up to the funding band maximum.

For apprentices who began before 1 April 2019, employers contribute 10 per cent, and the Government covers 90 per cent until the apprentice completes their training.

If an employer pays the Apprenticeship Levy, they receive funds for training and assessment, with an additional 10 per cent contribution from the Government.

Who pays the Apprenticeship Levy?

As an employer, you have to pay Apprenticeship Levy each month if you:

• Have an annual pay bill of more than £3 million.
• Are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million.

When should you get your accountant involved?

As you can see, apprenticeships are slightly more complicated than hiring regular employees.

As such, we always recommend telling your accountant if you are planning to/ already hire apprentices.

We can look at your finances and tell you if it’s the right option for your current business model.

Furthermore, if you are worried about the payroll obligations of hiring an apprentice, we can guide you through the process or even handle the whole affair for you.

Either way, it is always advisable to speak to your accountant sooner rather than later when it comes to apprenticeship matters.

To speak to an experienced accountant or payroll specialist, please get in touch with one of our team.

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Could you be eligible for this?

As announced by the Government in January, all businesses will be eligible for support with their energy bills.

However, if you are classed as an energy intensive industry, you will be able to receive extra support and bigger discounts.

If your energy costs are below £107/MWh for gas and £302/MWh for electricity, you will be unable to access this additional support.

If you are eligible, you will receive a discount on 70 per cent of your energy volume and your bills will be capped at £40/MWh for gas and £89.1/MWh for electricity.

The support for all businesses will come into effect on the 1 April 2023 until 31 March 2024.

Why has the support changed?

The previous scheme for businesses to support with energy bills was seen as a short-term solution but was ‘unsustainably expensive’.

Energy prices have now fallen by 40 per cent so while they are still higher than average, the Government decided the support given could be amended to take that into account.

Prices are also expected to fall even further between July and September so there is hope that bills will stabilise and this support will take the pressure off as this price drop continues.

How can you receive more support?

If you believe your business will require more support, we can offer guidance during this time on adapting your business plan, applying for relevant funding and maintaining your cash flow during the economic downturn.

Get in touch for more advice on this.

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So, the prospect of additional funding for technology that promotes operations comes as good news.

The Government has recently launched a new grant funding programme, worth £1.5 million, to encourage the innovation of artificial intelligence (AI) to lower carbon emissions.

This AI for Decarbonisation Programme involves two funding streams, with Stream 1 set to co-fund a virtual centre of excellence on AI and innovation.

This stream is worth up to £500,000 and will support the centre’s development up to March 2025.

Stream 2, which is worth up to £1 million, is set to kick in and support the development of AI technologies to further the decarbonisation goal.

How will this impact businesses?

If you operate in the AI industry, this could give a much-needed funding boost to elevate your operations.

You may be eligible for the funding if your project aims to support the transition towards renewable energy and improve energy productivity.

You can find more information on applying for funding here.

On a wider scale, all businesses should already have plans in place to achieve the UK’s Net Zero goal by 2050, and any new technology that aids this should be welcomed.

As stated by the Government, the move towards reducing carbon emissions is also set to reduce the cost of energy and increase the UK’s global competitiveness.

What are the benefits of grant funding?

Grant funding is a great way for you to get the support you need, without having to pay it back.

Grants are also widely available, and you may be able to apply for multiple, depending on the industry you operate in.

Need advice on funding opportunities? Get in touch.

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The Government scrapped the Plug-in Car Grant (PiCG) back in June, but due to delays in the supply chain, the grant has been reinstated.

Who is eligible for the grant?

If you are looking to buy an electric car, this £1,500 grant could ease the strain on your pocket.

The grant will only apply to cars that cost £32,000 or less, which means it is only available for cheaper models.

This grant will be automatically applied when you buy an eligible electric vehicle (EV), so there is no need to apply.

If you’ve already ordered you may be thinking that you’ve missed out. But the Government has announced that the grant will be applied to any eligible purchases from when the scheme stopped in June.

This extension will last for 18 months, with grants available until 31 March 2023.

Why has the grant been reintroduced?

The car industry has been hit with supply chain issues, stemming from the global semiconductor shortage and the war in Ukraine.

As a result, the industry has taken a hit, so the reintroduction of this grant is set to stimulate demand.

In its previous run, the PiCG supported the purchase of approximately 500,000 electric vehicles. Between 2011 and June 2022, this support amounted to £1.4 billion.

Are there other benefits of electric cars?

Electric vehicles are generally cheaper to run than their petrol and diesel counterparts. They also benefit from a lower benefit in kind tax rate.

As well as being exempt from vehicle tax, you could also reclaim the VAT paid on the car if it is used solely for business purposes.

If you are self-employed, you can also claim First Year Capital Allowances for the vehicle. This means you can deduct the cost of the car from your profits in the accounting period you purchased it.

For advice on grants and funding available to you, contact our team today.

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