Taking On An Apprentice as a Sole Trader
A Complete Guide
I'm interested in taking on an apprentice, but i'm a sole trader. Can I use the apprenticeships scheme?
Yes, absolutely. An apprentice can be taken on by any business. They do however, have to work for a minimum of 30 contracted hours a week, and they are eligible for national minimum wage after a year of being on or above the apprentice minimum wage.
It’s important that your business is committed to offering a valuable work experience, and that you can dedicate the time to mentoring your apprentice.
In this guide, we’ll take you through every aspect of using the apprenticeship scheme as a sole trader, even if the apprentice is going to be your first ever employee. Use the buttons below to learn more.
Taking On An Apprentice As Your First Employee
A Step By Step Guide
Decide A Rate Of Pay For Your New Apprentice
Taking on an employee can be a big financial commitment. The good news is, an apprentice is a great way to hire and train talent that grows with your business.
Apprentices must be paid the minimum hourly wage (currently £4.81 for 2022/23). However, in our years of experience we really recommend assessing your finances to find the best possible wage for your apprentice that is affordable. This ensures you retain talent and build a great relationship with your apprentice.
It’s also worth noting that if your apprentice is 19+, after the first year of their apprenticeship they’ll be eligible for the national minimum wage of £6.83+ (depending on age).
Obtain Employer's Liability Insurance
In the UK, Employers Liability Insurance is a legal requirement from the moment you take on your first employee. You’re required to get a minimum of £5million of cover, and you must obtain this from an authorised insurer.
The only exception is if your apprentice employee is an immediate family member. It’s also a legal requirement to display your employer’s liability certificate.
Register As An Employer With HMRC
HMRC will need to be informed that you are now an employer. This can be done using the government portal, but you’ll need to time this no earlier than 4 weeks before you first pay your new staff member.
It can take up to 5 working days, but HMRC will then issue you with a PAYE number for that employee.
It may be worth consulting with an accountant at this point, as running payroll can be a tricky task. You’ll need to consider things like National Insurance Contributions and what PAYE tax band your employee falls into.
Do Your Research Regarding Pension Schemes
If your apprentice will be earning over £10,000 a year, or is 22 or older, then you will be legally required to enrol them onto a workplace pensions scheme.
You must inform your apprentice of the scheme and enrol them within 6 weeks of them meeting this criteria, but they can opt out if they wish.
As an employer, you’ll need to make pension contributions on your employee’s behalf – it isn’t all taken from their salary. Again, we recommend consulting with an accountant if you are unsure in this regard.
Consider Becoming a Limited Company...
When you begin to reach the turnover and profits of a business which can afford to hire an apprentice, the likelihood is, it’s more tax efficient for you to become a limited company.
A sole trader can absolutely hire an apprentice, if it suits them. That said, there’s plenty of financial incentives, tax breaks and legal requirements that suit limited company structures better.
Nowadays, there are plenty of affordable accounting services that will not only help you to set up your limited company, but will also help you to manage payroll.
Taking on your first employee can be a monumental task for a small business, so be sure to do your research and financial planning before undertaking the task.
Hiring an Apprentice
A How-To For Sole Traders
Ok, so you have all the UK legal requirements in place for hiring an employee, let’s begin the process of taking on an apprentice as a sole trader.
Step One: Choose Your Apprenticeship Qualification
At NTG, we offer a wide range of fantastic apprenticeship courses, all of which are tailored to your needs and unique goals as a business.
Although you’ll work closely with the apprenticeship tutor to design the work programme for your apprentice, it’s important to ensure the course covers everything you want them to learn, in order to perform their duties and new job role.
Step Two: Check What Funding You Qualify For
Paying for apprenticeship training is extremely affordable and highly incentivised by the government. For most businesses, the funding is covered 95% by the government.
In fact, as a sole trader you’re even likely to qualify to have the apprenticeship training covered 100% free through government grants, if you have less than 50 employees and your apprentice will be aged 16 – 18.
Step Three: Get In Touch With An Approved Training Provider
Apprenticeship training must be carried out by an approved government training provider, such as ourselves!
At NTG Training, we pride ourselves on offering nothing short of 5* excellence, just check out our reviews.
Our fees are covered in the funding you receive from the government, so reach out today and get the advice you need to get started!
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