Are there employment costs I can claim back from the government?

There is no doubt that employing people is an expensive business and this burden is set to get heavier from 6 April 2025 when more employers will be paying more in NI contributions.

You will be aware that Statutory Sick Pay (SSP) can no longer be reclaimed from the Government. However, read on for some suggestions on ways to ease the load of employment costs for your business…

1. Statutory Family Leave Payments

These include Statutory Maternity, Statutory Paternity, Statutory Adoption, Statutory Parental Bereavement and Statutory Shared Parental Pay.

You may be able to reclaim between 92% and 103% of these payments.

If you are an SME who qualifies for Small Employer’s Relief, with Class 1 National Insurance liability at or below £45,000 a year, you can recover 100% of family leave-related statutory payments, plus a further 3% to reflect NICs on the payment.

If you are eligible to reclaim these statutory payments, they should be included in the Employer Payment Summary (EPS) and sent to HM Revenue and Customs (HMRC). Payroll software can be used to calculate the amount to reclaim, but if you don’t have payroll support get in touch and we’ll provide advice on how to do this.

It’s worth knowing that if your business cannot afford to make these payments up front, you can apply for an advance of the money online to HMRC. You can make the application up to four weeks before the first payment is needed and it must be repaid by the month’s normal payment date at the end of the period the advance covers.

2. Apprenticeships

a) Apprenticeship funding

If you are a UK employer, whether in the private or public sector or a charity, and your annual “pay bill” is £3 million or more, you will be contributing to the Apprenticeship Levy Fund and will be aware that you can access funding for apprenticeship schemes through your account.

However the scheme provides support to employers whether or not you pay in. In England, (the arrangements are different elsewhere in the UK) you can get money to go towards the cost of training and assessment, as follows:

If you do not pay the levy, you would pay 5% towards the cost of training and assessing the apprentice and the Government covers the rest, subject to a funding band maximum. Subject to certain eligibility rules, the cost of training and assessment for an apprenticeship can be fully funded.

If you do pay the apprenticeship levy, the Government will add 10% to your apprenticeships service account to spend on training and assessment of apprentices.

b) Additional payments

Under the apprenticeship funding rules which apply in England during the period from August 2024 to July 2025, (the arrangements are different in Wales) employers can receive an additional £1000 payment towards the additional costs associated with training an apprentice if, at the start of the apprenticeship training, the apprentice is:

• aged between 16 and 18 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August)

• aged between 19 and 24 years old and has either an Education, Health and Care (EHC) plan and/or has been in care.

This payment is made in stages. The first payment of 50% is paid 90 days after the apprentice’s learning start date, if the apprentice is still undertaking their apprenticeship. The remainder is paid 365 days after the apprentice’s learning start date, again if the apprentice is still undertaking their apprenticeship. This can be spent on any costs related to the employment of the apprentice, e.g. their salary, travel costs or uniform.

All other employment costs are covered by you as the employer.

For support with accessing these sources of support give us a call and we will do what we can to help.