Apprentices. HMRC has confirmed that starting from 6 April 2016 employers will be entitled to an exemption from secondary Class 1 NI contributions in respect of wages for employees who are apprentices and aged under 25 at the time they are paid. Note. The exemption doesn’t apply to primary Class 1 contributions, i.e. those payable by the apprentices.

Exemption limits. The exemption will apply to earnings up to the NI upper limit, which is expected to be at least £815 per week for 2016/17. In the unlikely event that you pay an apprentice more than the upper limit, secondary contributions at the normal rate, currently 13.8%, will be payable on the excess.

Action required. Payroll software providers and HMRC will update their programs to take account of the change before the start of 2016/17. Whatever software you use, each time you run a payroll after 5 April 2016 you’ll need to indicate which of your employees are qualifying apprentices.

From 6 April 2016 you won’t have to pay employers’ NI contributions on apprentices’ wages as long as at the payroll date they are aged under 25. When your payroll software is updated for 2016/17 make sure you know how to indicate that the exemption applies.