Government apprenticeship incentive scheme

Last month during the Spring Budget, the Chancellor announced that the Government were increasing the incentive payments for hiring a new apprentice.

Employers will now receive £3,000 for new employees of any age who start their apprenticeship from 1 April 2021 to 30 September 2021.

There will be no limit on the number of incentive payments you can claim provided the eligibility criteria is met.

The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:

Apprentices who joined your organisation before 1 April 2021

For new apprentices who joined your organisation between 1 August 2020 and 31 March 2021 aged:

  • 16 to 24, employers will receive £2,000
  • 25 and over, employers will receive £1,500

You must apply for these apprentices before 31 May 2021.

Apprentices who joined your organisation from 1 April 2021

Employers will receive £3,000 for new employees of any age who start their apprenticeship from 1 April 2021 to 30 September 2021.

You can apply for incentive payments for these apprentices from 1 June 2021.

What can I use the incentives for?

You can spend the incentive payments on anything to support your organisation’s costs, however the Government recommends using the additional funds to add value to the apprenticeship which ultimately will benefit your business in the long term. This incentive does not need to be paid back.

You could use the incentives for:

Eligibility

You can only apply for new apprentices who joined your organisation between 1 August 2020 and 30 September 2021.

You cannot apply for an existing employee who joined your organisation before 1 August 2020, even if they started an apprenticeship after this date.

How to apply

You need to set up an apprentice service account before you can apply for the incentive payment.

How is payment made?

HMRC will need to verify your organisation and finance details before any payments are made which may take up to 3 months.

The payment for each apprentice is made in 2 equal instalments. The first payment is sent after an apprentice completes 90 days of their apprenticeship and the second payment is sent after 365 days.

Once you have applied, you can log in to your apprenticeship service account and view applications and estimated payment dates for each apprentice you have applied for.

Further details on the scheme can be found at gov.uk.

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