Apprenticeships can help firms beat National Insurance Contributions rise, says FBC Manby Bowdler
A leading employment law specialist says companies can beat the imminent increase in the cost of employing staff – by hiring apprentices.
Julia Fitzsimmons says a little-known measure introduced in November’s Budget means employers hiring apprentices under the age of 25 do not have to pay National Insurance Contributions on their wages.
Julia, head of employment law and HR at Shropshire law firm FBC Manby Bowdler, said the exemption offered a significant incentive for employers to take on more apprentices ahead of the rise in National Insurance Contributions (NICs) in April.
The April 6 move will see employers’ NICs increase from 13.8% to 15% at the same time as the payment threshold reduces from £9,100 to £5,000 per year.
Julia said: “The increase in NICs has raised fears of a recruitment freeze and job cuts across the UK as firms reassess their position in the face of rising employment costs.
“But there is a key exemption which can really help employers who are striving to achieve growth whilst managing their budgets.
“Employers hiring apprentices under the age of 25 are now exempt from paying NICs on their wages, giving employers a clear opportunity to bring in new talent without facing additional costs.
“Degree apprentices under 25 are also included in the exemption broadening the range of talent which employers can access.
“There are many wider benefits to employing apprentices – not least of which is introducing fresh talent and building skills, loyalty and motivation – so I would urge employers to give serious consideration to making the most of this exemption.
“National Apprenticeship Week offers the perfect opportunity for employers to find out more about the overall benefits of taking on apprentices.
“We know from our close working relationships with employers across the region that there are deep-seated worries about the NICs rise and its impact on payroll which this exemption may help address.”
FBC Manby Bowdler, which has offices across Shropshire and the West Midlands, has been a long-time supporter of National Apprenticeship Week and has pioneered attracting new talent to the legal sector through apprenticeships.
Last year the firm announced a £30m investment from Horizon Capital to fund ambitious plans to double its size in the next 18 months, including the creation of approximately 20 new jobs.
Pic: Julia Fitzsimmons, Partner and head of the Employment Law and HR team at FBC Manby Bowdler.
