Do I Need A PAYE Scheme For An Apprentice?

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Do I Need A PAYE Scheme For An Apprentice?

Since apprentices are like your employees, they are treated the same way for tax purposes. In other words, you will have to pay National Insurance Contributions and taxes just like everyone else. Normally, you will be taxed on the basis of the pay-as-you-earn system aka PAYE. Now, the question is, do you need a PAYE scheme for an apprentice? Let’s answer this question in detail. 

Today, the apprenticeship service helps with the arrangement of apprenticeships. Therefore, you need to create an account if you want to try the apprenticeship service. Let’s find out how you can do it.

1. Before creating your apprenticeship service account 

Before you create your apprenticeship service account, you will need the following:

  • Your email address 
  • The Government Gateway login for your company. Alternatively, you can use the employer PAYE scheme reference number or the accounts office reference number, especially if you pay an annual amount of below £3 million in salaries. 
  • Permission to add PAYE scheme to your account
  • Permission to get the employee agreement 

You will be asked to:

  • Register for an account 
  • Add a PAYE scheme 
  • Acknowledge the employment agreement with the Education and Skills Funding Agency (ESFA)

How can you get a PAYE scheme reference number?

If your business is too small to pay the apprenticeship levy, your next option is to use your Account Office Reference Number (AORN) and your PAYE scheme reference number.

If you have no employees, you may register with a PAYE scheme reference number. In this case, you can register with HMRC for your PAYE scheme reference number.

Using your PAYE scheme reference number 

Once you have got your PAYE scheme reference number, you need to create your apprenticeship service account by completing a few more steps.

  • Make a minimum of one payroll return to HM Revenue & Customs through the PAYE tool. 
  • Inform HMRC about hiring an apprentice according to the PAYE of your business and provide the data 

2. Signing up for the apprenticeship service 

Once everything is in place, you can create your account and proceed according to the instructions.

3. Using your account 

Given below is what you can do as an employer after you have set up your account: 

  • Get access to and manage the funds for apprenticeships 
  • Get apprenticeship founders 
  • Advertise vacancies to look for apprentices 
  • Go for an apprenticeship training course 
  • Look for a training provider 
  • Make a list of good end-point assessment organizations 
  • Provide feedback about apprenticeship training 
  • Allow training providers to perform specific tasks on behalf of you

If you pay the apprenticeship levy, you are authorized to:

  • Add PAYE schemes for apprenticeship funding 
  • Add your training providers 
  • Send up to 25% of the spare annual funds to your chosen employers 

If you don’t pay the apprenticeship levy, you may reserve your apprenticeship funding. 

In short, you may need a PAYE scheme for an apprentice depending upon several factors listed in this article. Hope this helps. 

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