HMRC has confirmed that starting from 6 April 2016 employers will be entitled to an exemption from Secondary Class 1 NI contributions in respect of wages for employees who are apprentices and aged under 25 at the time they are paid. However, the exemption doesn’t apply to primary Class 1 contributions i.e. those payable by the apprentices.
The exemption will apply to earnings up to the NI upper limit, which is expected to be at least £815 per week for 2016/17. In the unlikely event that you pay an apprentice more than the upper limit, secondary contributions at the normal rate, currently 13.8%, will be payable on the excess.
payroll software providers and HMRC will update their programs to take account of the change before the start of 2016/17. Whatever software you use, each time you run a payroll after 5 April 2016 you’ll need to indicate which of your employees are qualifying apprentices.