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HMRC internal manual

National Insurance Manual

Class 1 structural overview: abolition of secondary NICs for apprentices under the age of 25: definition

Section 9B (4) Social Security Contributions and Benefits Act (SSCBA) 1992 – Zero-rate secondary Class 1 contributions for certain apprentices

Regulation 154A of the Social Security (Contributions) Regulations 2001 defines ‘apprentice’ for zero-rate employer Class 1 National Insurance contributions (NICs) for apprentices under 25.

Education is a devolved matter so there are different rules in each country in the United Kingdom as to what constitutes an apprentice for this zero rate relief.

England

The person is employed under an approved English apprenticeship agreement as defined by Section A1 of Apprenticeships, Skills, Children and Learning Act 2009). This is an arrangement which either:

Takes place under an approved “English apprenticeship agreement”, which

  • provides for the apprentice to work for another person for reward, in a sector for which the Secretary of State has published an approved apprenticeship standard under section A2,
  • provides for the apprentice to receive training in order to assist the apprentice to achieve the approved apprenticeship standard in the work done under the agreement,
  • satisfies any other conditions specified in regulations made by the Secretary of State,

or

Is an “alternative English apprenticeship”, which

  • is an arrangement, under which a person works, which is defined by regulations,
  • can be where a person works otherwise than for another person, or
  • can be where a person works otherwise than for reward.

A person completes an approved English apprenticeship if the person achieves the approved apprenticeship standard (the standard which applies in relation to the work to be done under the apprenticeship) while doing an approved English apprenticeship. This is important to know, because an employer is only entitled to the relief for the duration of the apprenticeship.

Wales

The person is employed under an approved Welsh apprenticeship agreement (as defined in Section 32 of Apprenticeships, Skills, Children and Learning Act 2009). This is an arrangement in which:

  • the apprentice undertakes to work for another (the employer) under the agreement;
  • the agreement states that it is governed by the law of Wales;
  • the agreement states that it is entered into in connection with a recognised Welsh apprenticeship framework.

Scotland

The person is employed under an approved Scottish apprenticeship agreement under arrangements made under either:

  • section 2 of the Employment and Training Act 1973, or
  • section 2 of the Enterprise and New Towns (Scotland) Act 1990

Northern Ireland

The person is employed under an approved Northern Irish apprenticeship agreement under arrangements made under section 1 of the Employment and Training Act (Northern Ireland) Act 1950.