The term ‘apprentice’ will instantly make people with little interest in business think of the ruthlessness of Alan Sugar, particularly since the popular BBC series is now back on our screens. Inside of businesses too, companies are embracing apprentices, with a recent report showing that more than a third of UK SMEs either have an apprenticeship scheme in place or are planning to introduce one.
This year’s Albion Growth Report shows that, while only 12% actually have an up and running scheme, 23% more are tempted by the idea. By and large, they’re happy with the way they’re shaping up as well, with just 1% planning to ditch their programme.
Tax-free temptations
Among the benefits of taking on apprenticeships are tax incentives, cited by 38% as an attraction of such schemes, and it will have been music to many employers’ ears that the Budget 2014 revealed an increase in funding for the Apprenticeship Grant for Employers (AGE). Interestingly, this draw is particularly strong in the South, perhaps due to companies feeling the pinch from generally higher staff salaries and land rental.
Cutting costs is indeed a big pull factor of bringing in apprentices aged 16 – 24, and AGE-eligible companies are entitled to a tax-free grant of £1,500, as well as help towards training costs. Of course, with the help of an outsourced accounting service, small business owners can make sure they are getting everything they are entitled to and use the time they would have spent on bookkeeping to shore up their scheme.
Waging in
The minimum wage for an apprentice is currently set at £2.73, but after their first year, any apprentices over the age of 18 must be paid at the national minimum wage for their age. This went up at the start of this month and is currently set at £6.50 for workers aged 21 and over, but you’ll be able to find the latest rates easily on Gov.uk websites.
Note of caution
Though money can be saved through apprenticeships, they should not simply be seen as a way to get work done on the cheap, and it’s always worth considering that a field in which an apprenticeship is offered could become a full-time position in time. It may be that your apprentices themselves are able to dazzle and make this position their own, thus meaning that your scheme has growth in mind rather than just short-term cost cuts.
For the best advice on how apprenticeships can have short-term and long-term profitability benefits, and to allow yourself the time you need to focus on it, speak to an established outsourced accountancy provider like Sollertia.