Employment groups welcome tax relief on apprenticeships

Employers and employment groups have welcomed the government’s announcement that all national insurance (NI) charges on taking on apprentices under 25 are to be abolished.

Chancellor George Osborne made the announcement in the autumn statement. It was one of very few details that hadn’t been widely predicted before the event.

PwC employment tax partner John Harding called the move “a further boost to tackling youth unemployment”.

“[It] will enable employers to invest the savings they make in national insurance in training and development or even more jobs,” he said. “For an employer with 100 apprentices earning around £22,500 a year, the overall saving to the company could exceed £200,000 per year.”

Association of Employment and Learning Providers CEO Stewart Segal also welcomed the move. He went on to urge the government to extend the exemption to all apprentices who were previously unemployed.

City & Guilds praised both the policy on apprenticeships and the decision to offer loans of £10,000 to postgraduate students.

Chief executive Chris Jones called the abolition of NI payments for young apprentices a “welcome surprise”. But he added the government must make sure assistance in this area “doesn’t stop at a tax cut”.

“It is crucial that the government continues to work with education providers and businesses to ensure we are developing the skills that our economy needs,” he said.

Meanwhile City & Guilds managing director Kirstie Donnelly expressed hope that the accessibility of loans for postgraduate students will be extended to higher-level vocational courses.

“The government’s focus is quite obviously on young people, but it’s also important that older people who are looking to re-train and re-skill receive support. In a world where the nature of work is changing, we need to be looking at developing the skills of everyone – not just those under the age of 30,” she said.