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.

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