Update following the 2018 Budget
Reduction in Apprenticeship Fees:
Philip Hammond announced in his Budget 2018 speech on Monday that the fee SMEs must pay when taking on apprentices is to be halved from 10% to 5% of the pay bill from April 2019.
This reduction comes as part of a “£695 million package to support apprenticeships”.
It is not yet clear whether the change will apply to those employers who are affected by the apprenticeship levy (those with a pay bill over £3 million), once their levy pot is empty.
It has also been announced that up to £5 million will be provided to the Institute for Apprenticeships and National Apprenticeship Service in 2019-20, in order to “identify gaps in the training provider market and increase the number of employer-designed apprenticeship standards available to employers”.
These changes should be welcomed by SMEs and hopefully enable smaller businesses to begin offering more apprenticeships.
Minimum Wage Changes:
The Chancellor also announced the new minimum wage rates to come into effect from April 2019, they are:
- Apprentices – £3.90 per hour (up from £3.70)
- Under 18s – £4.35 per hour (up from £4.20)
- 18 to 20 – £6.15 per hour (up from £5.90)
- 21 to 24 – £7.70 per hour (up from £7.38)
- 25 and over – £8.21 per hour (up from £7.83)
Employers should bear the new rates in mind and take steps to prepare for the implementation of the changes in April 2019.