Government promises to cut NI payments for young employees
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By Laura Hailstone
THE GOVERNMENT has pledged to make it cheaper for businesses to employ young people. In his Autumn Statement last week, chancellor George Osborne announced that the government would abolish national insurance (NI) contributions for those under 21 earning less than £813 a week, equivalent to the point at which higher rate tax is charged, from April 2015.
The cut applies to both existing employees and new staff. As a result, an employer will save more than £500 for every worker under 21 earning £12,000; and more than £1,000 for those earning £16,000.
Nearly 1.5 million young employees under 21 will be lifted out of employer NI contributions completely, with an average saving of £355 per employee.
Jack Semple, director of policy at the Road Haulage Association (RHA), said: "It will help to off-set the [financial] disadvantages hauliers have of recruiting under 21 year olds as drivers. The number one issue for our members is getting new drivers into the industry."
Building on its focus of getting employers to take ownership of training, the government also pledged to put businesses at the heart of the apprenticeship system. It said it will enable employers to receive funding for the training costs of apprentices directly through an HMRC-led system and would ensure that employers contribute. The Autumn Statement also revealed that the government will invest about £10m a year in Jobcentre Plus support for 16 and 17 year olds who want help to find apprenticeships and traineeships, to be delivered in partnership with local authorities; and provide £40m to deliver an
additional 20,000 higher apprenticeship starts over the next two academic years.
Meanwhile, the RHA is developing a training and skills manifesto for the haulage industry, which it hopes to work with the government on.