David Maslen, Head of Tax at Old Mill, comments on business owners that have decided not to take on apprentices or teenagers, as a result of NIC changes, and how they could be making big decisions based on an "incorrect understanding of the rules".

Rachel Reeves’ 30 October Budget contained significant changes to employer’s national insurance which are due to take effect from 6 April 2025. However, businesses who have decided not to take on apprentices or hire teenagers for Saturday jobs as a result of the Budget need to be aware of the rules around under 25s.

David Maslen, Head of Tax at Old Mill said:

There are categories of employee where this additional NIC burden will not arise, and this does not appear to be widely understood. Where a business is employing someone who is under 21, there is no employers NIC unless that staff members’ salary exceeds £50,270 in the year.  The same applies for a business employing someone under 25 on a formal apprenticeship.  The same applies again for a business employing veteran.

We are seeing articles where business owners are talking about not taking on young staff or cutting back on apprenticeships which suggests that this is an area which is not understood and could be leading to businesses making decisions based on an incorrect understanding of the rules.

Businesses are making decisions based on an incorrect understanding of National Insurance rules

✉️ Rachel Esland, PR Manager, Phoenix Group, rachel_esland@thephoenixgroup.com