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Apprenticeship Incentive Payments Update 28 January 2021

** Article Update: The Apprenticeship Incentive Payment Scheme has been extended until 31 March 2021 from its original expiry date of 31 January 2021**

As part of his ‘Plan for Jobs’, last week the Chancellor announced that an incentive payment would be made to employers who hire an apprentice between 1 August 2020 and 31 January 2021 (now extended until 31 March 2021).

The government have now published further details regarding the eligibility rules for the new apprenticeship employer incentives.

Payment incentives:

There will be two levels of payments made based on age as follows:

  • For apprentices aged between 16-24 the payment will be £2,000
  • For apprentices aged 25 and over the payment will be £1,500

Payments will be made directly to employers in two equal instalments, where the apprentice is still in learning at day 90 and day 365.

The incentive payments are in addition to the existing £1,000 payment that employers already receive for the hire of 16-18 year olds.


For employers to receive the incentive payments, the apprentice:

  • must be a new employee to the business
  • must have a contract of employment start date between 1 August 2020 and 31 January 2021 (now 31 March 2021)
  • must not have been employed by the employer within the six months prior to the contract start date.

Claims can be made by employers in relation to the qualifying apprenticeships from 1 September 2020. Any claims must be made through the apprenticeship service.

The guidance confirms that there will be no limit on the number of incentive payments that an employer can claim for apprentices provided each apprentice meets the above criteria.

You can read the full guidance document here.

Apprenticeship Levy

In addition, guidance from the government suggests that there is still no plan to pause the collection of the apprenticeship levy due to the Coronavirus disruption. They have updated their ‘Frequently Asked Questions’ which you may find of use. You can access the guide here.

If you have any questions in relation to the above you should not hesitate to contact your usual engagement partner.

NB: Due to the nature of this update, we would always recommend seeking independent legal advice before taking action.