Guide to Taking on an Apprentice as a Sole Trader - VW Taxation Ltd

Guide to Taking on an Apprentice as a Sole Trader

Particularly in the construction industry, apprentices have long played a role in maintaining traditions and ensuring skills like plumbing, bricklaying and woodwork are passed on through the generations.

While apprenticeships have taken different forms over the years, this type of teaching and learning they deliver has been around for more than 100 years.

For apprentices themselves, there is no substitute for getting experience on the job and it remains one of the key ways younger people develop a useful skill that can then improve their employment opportunities.

For businesses, including sole traders, taking on an apprentice can provide extra assistance while helping keep down the costs.

Employing casual staff and apprentices

Casual staff are employed on an irregular basis, often on demand. For a building or construction business, for example, this could be dependent on the type of work that needs to be carried out. Restaurants, bars and cafes, on the other hand, will often take on casual staff when they have busy times during the Christmas period or over the summer.

Apprentices are normally hired for a specific time and they are generally working towards a nationally-recognised qualification. They do this through a mixture of study and being employed by someone related to the area they are learning about. These individuals can be fairly young and are paid according to an existing agreement.

Any apprentice should be paid the national minimum wage but this can vary depending on the age. For a 16-year-old, for example, the minimum wage is £4.30 per hour. Taking on an apprentice can be a taxefficient solution while still getting help and support for your business.

What are the benefits of employing an apprentice?

There are lots of reasons to employ an apprentice if you feel they will fit into the operation of your business. Not only are you allowing them to learn on the job and work towards a useful qualification, but they can also help provide a real service to your business. The age of apprentices can vary considerably. Most are probably between the ages of 16 and 24 but there are also those 25 and over.

According to Government research, taking on apprentices not only add to productivity but can help add value and quality to a business. The training needs for most apprentices necessarily need to be adaptive which means you can tailor them to meet your requirements.

Apprentices also tend to be more motivated than ordinary staff who may be more concerned about clocking off than learning a new skill or finishing a job. In many cases, businesses take on an apprentice and then employ them full-time once they have finished their course.

For businesses, employing an apprentice enhances their reputation across the wider community and even helps bring in new business. There are some important factors to take into account, of course. You will need to draw up an agreement between yourself and the apprentice, pay them the minimum wage and ensure they get enough hours to meet their training obligations.

Apprentices must be allowed to work with experienced staff and learn job-specific skills. You also need to put aside some 20% of their working hours for study or attending courses.

Employers must make sure that apprentices get the right training, skills that make them employable for the future. Particularly in the construction industry, individuals don’t always learn the higher level of skills needed and these can often be more easily added to in the workplace.

Can you have an apprentice if you are self-employed?

Self-employed individuals who act as sole traders are quite common, particularly in the construction industry. While they used to be ignored, the government is now trying to make apprenticeships working with skilled sole traders more common. Recent changes mean that, if you are self-employed, there are now fewer hurdles and there’s no doubt that it could have significant benefits for your business.

There is, however, a certain amount of paperwork to deal with. For a start, making sure you get the right apprentice who will also benefit from your business can often be a challenge. Assuming you achieve this, however, you may well need to set up a new facility with HMRC.

Of course, you will need to pay the apprentice a wage. That means must register with HMRC as an employer. That also means you will need to set up PAYE which can be sent to HMRC – fortunately, there are some solutions out there already that make it easy for you. That could include building a relationship with a local, small business and sole trader accountant.

You could design the apprenticeship yourself and advertise for someone to join it and then try to secure incentive payments from the government. Most businesses, however, don’t have the time and use an agency that specialises in apprentices.

These can be quite useful for businesses that are simply looking for support but don’t want the hassle of paying wages. The agency becomes the apprentice’s formal employer, using your business as a third party service that delivers the experience they are looking for.

Do companies get paid to take on apprentices?

Employers can already benefit from a one-off payment of £1,000 for taking on an apprentice.

Now, from March 2021 and to support more businesses, the Government has introduced incentive payments for individuals and organisations who can take on an apprentice. This includes a £2,000 payment for anyone between the ages of 16 and 24 and a payment of £2,500 for someone over the age of 25. Of course, if you are going through an intermediary such as an agency, this payment will most likely go to them rather than you.

Why Work with VW Taxation?

We come across a lot of sole traders during our working week, especially from the construction industry. Many are keen to take on an apprentice. Working out the best way to do this can be challenging if you’ve never done it before.

Our expert accountancy team is based in Cosham Portsmouth, and provides a whole range of services, including helping you set up as an employer with HMRC or introducing PAYE to your business. If you’d like to find out more, contact us today.

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Picture of Gary Ellis | Director | VW Taxation
Gary Ellis | Director | VW Taxation

VW Taxation are self employment tax specialists based in Portsmouth. We specialise in tax accounting for contractors, limited companies and the self-employed.

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