An apprenticeship involves work-related training as well actual job-related tasks and serves as an ideal tool for individuals trying to make extra money while they learn through a combination of training and a job. This blog post explores the fine details of the similarities and differences between an apprenticeship and full-time education as well as the taxes and benefits that apprentices receive under UK law.  

Is An Apprenticeship Full Time Education?

Yes, an apprenticeship counts as full-time education if you are able to work for at least 30 hours per week under the apprenticeship national minimum wage. If working hours are to be reduced due to the nature of execution of work and the individual’s circumstances, it can only be reduced to 16 hours to be counted as an apprenticeship. 

In this case, the duration of the apprenticeship period must be extended. This means that a two-year apprenticeship that requires you to work for 16 hours per week, may need to be extended to a three-year duration to make up for missing essential hours.

According to UK law, you must be in full-time education until the age of 18 years. However, the government requires you to either work as an apprentice or spend at least 20 hours per week for volunteer work alongside training or studying.

If you are 16 years or older, living in England and not enrolled in full education, you can be an apprentice.

In addition to gaining work skills, as an apprentice, you will also be able to earn a wage, get holiday pay and get training specific to your area of work. Generally, apprenticeships take between 1 to 5 years for completion; depending on the nature and area of work.

Apprentices are entitled to paid holidays and working time regulations as full-time employees. However, under UK law, anyone under the age of 18 must not be asked to work for more than 8 hours per day or 40 hours per week.

How Much Do Apprentices Get Paid?

As per recent figures (April 2022), the national minimum wages in the UK are categorised on the basis of age as follows:

AgeNMW Rate
Apprentice£4.81
Under 18£4.81
18-20£6.83
21-22£9.18
23 and above£9.80

Apprentices can claim the national minimum wage if they are at least 19 years of age or more than 19 years old and in the first year of their apprenticeship.

The earnings that apprentices are paid include payments for the normal working hours stated in their employment contract or apprenticeship agreement, any training that is essentially part of their apprenticeship and lasts a minimum of 20% of their normal working hours, as well as additional study time for English and Mathematics qualifications (if they are part of the work that you will perform during the apprenticeship).

Do Apprentices Have To Pay Tax?

Yes, apprentices pay taxes on their income in the same way as full-time employees. Incomes above the minimum cap are taxed at an incremental rate of 20 per cent to 45 per cent depending on whether an individual belongs to the basic, higher or additional tax rate band. Below are details of these bands:

  • 0 per cent income tax when income is up to £12,570
  • 20 per cent income tax when income is between £12,571 and £50,270 
  • 40 per cent income tax when income is between £50,271 and £150,000 
  • 45 per cent income tax when income is above £150,001

Do Apprentices Have To Pay National Insurance?

Yes, apprentices have to pay National Insurance if they earn more than £184 per week (applicable rates for 2021-222). As per UK law, individuals earning between £184 and £967 are charged at 12 per cent for their National Insurance Contributions (NIC) while those earning more than £967 per week will be charged an additional 2 per cent.

However, if you are an apprentice with earnings more than the lower earnings limit which amounts to £120 per week or £520 per month (applicable for 2021-22) and lesser than the primary threshold which amounts to £184 per week or £797 per month (applicable for 2021-22), your NIC record will be credited. This means that while you are not required to pay NIC, it will appear that you have made the contributions. NIC credits may help you in the long term to earn you contributory benefits or state pension.

Do Apprentices Have To Pay Council Tax?

Anyone under the age of 18 and under specific apprenticeship schemes becomes eligible for council tax exemption if they live alone. However, you will need to provide the following from your employer:

  • Your earnings will not be more than £195 per week
  • The training that you receive as part of the apprenticeship will lead to a qualification which is accredited by a body which is recognised by the Office of Qualifications and Examinations Regulation or the Scottish Vocational Education Council,

However, if you share your home with family, as an apprentice, you will be considered as disregarded for council tax. You will still need to apply to your local council for an exemption or discount.

Can Apprentices Claim Working Tax Credits?

According to the HM Revenue and Customs, apprentices can claim working tax credits under the following conditions:

  • the apprentice can provide proof of employment such as a contract of employment 
  • the apprentice is part of an apprenticeship scheme where the payments they receive are classed as earnings and not reimbursement of expenses (earnings are subject to income tax and National Insurance contributions while reimbursement of expenses is not)

However, if an apprentice’s earnings are classified as non-taxable training allowance or a tax-exempt discretionary allowance, their apprenticeship working hours will not be counted as remunerative work and they will not be able to claim tax credits.

In general, to be able to qualify for working tax credits, an individual should be able to fulfil the below criteria:

  • if they are 25 years of age, they should be in remunerative work for a minimum of 30 hours each week
  • if they are 16 years old, they should be working a minimum of 16 hours per week 
  • if they are 60 years old, they should be and working a minimum of 16 hours per wee
  • anyone with a physical or mental disability due to which they are unable to get a job

Does An Apprentice Get Universal Credit?

According to the Department for Work and Pensions, apprentices can claim Universal Credit if they fulfil the below criteria:

  • they have a named training provider 
  • they are working towards a recognised qualification or vocational training
  • they are entitled to the national minimum wage

While there are no upper or lower limits to the number of hours that an apprentice must work in order to claim Universal Credit; however, they must be working at least 30 hours per week.

Does Everyone Have To Pay Taxes In The UK?

According to a general estimate, an individual pays one-third of their income in the form of taxes in the UK. While the amount of tax one pays depends on the scale of their income, some people will pay a higher tax perhaps due to the property that they own or inheritance that they may receive.

There are different types of taxes under the UK taxation system. Direct taxes include PAYE (Pay As You Earn) and National Insurance. These account for 20 per cent of an individual’s income. On the other hand, indirect taxes include VAT, council tax as well as duties on alcohol and petrol. 

Basic taxes in the UK include the following:

  • Income Taxes 
  • Property Taxes 
  • Capital Gains 
  • UK Inheritance Taxes 
  • Value Added Tax 

However, individuals may apply for tax exemption if they face the following conditions:

  • If someone is a tax resident for at least one year out of the previous three years 
  • They have spent less than 16 days in the UK during the previous tax year
  • They are not a UK resident

The same applies in case:

  • Someone is not a tax resident for the previous three years
  • They have spent less than 46 days in the UK

Who Collects Tax Revenues In The UK?

The HMRC collects and administers tax collection in the UK. HMRC administers the following central taxes while local governments collect council tax:

  • Income tax
  • Corporation tax
  • Capital gains tax
  • Inheritance tax
  • Insurance premium tax
  • Stamp, land, and petroleum revenue taxes
  • Environmental taxes
  • Climate change and aggregates levy and landfill tax
  • Value-Added Tax
  • Customs duty
  • Excise duties

Conclusion:

While apprenticeships count as a full-time education, there are certain conditions that apply with regards to one’s working conditions. For instance, you must work a minimum of 30 hours and not earn more than £195 per week to be categorised as an apprentice and enjoy the full benefits of one. While an apprentice may claim state benefits such as Universal Credit and Council Tax Reduction, they are still required by UK law to contribute towards Income Tax and National Insurance Contributions on the basis of their income band.

FAQs: Is An Apprenticeship Full Time Education?

Is an apprenticeship full-time education or employment?

By the nature of it, a full-time apprenticeship is like a full-time job with minimum working hours of 30 per week. In addition to this, study time or training time is also allocated which may be at the workplace, at home or at an educational institution. However, as per UK law, an apprenticeship is accepted as full-time education.

Is an apprenticeship considered full-time education for universal credit?

According to the Department for Work and Pensions, if an apprentice can provide a named training provider, they are working towards a recognised qualification or vocational training and are entitled to the national minimum wage, they can claim Universal Credit.

What level of education is an apprenticeship?

Since an apprenticeship is a combination of study and work, there are different levels. While some apprenticeships are equal to a Bachelor’s, some may qualify for a Master’s.

Is an apprenticeship classed as education or training?

An apprenticeship is a job with training. Therefore, you learn about the job, perform certain tasks and take regular part in training as you earn a wage. However, an apprenticeship is classified as full-time education.

What counts as full-time education?

More than 12 weekly hours of supervised study or course work-related training counts as full-time education. Anyone studying less than 12 hours per week will be classified as a part-time student. 

References:

Does an Apprenticeship Count as Full Time Education? – Employing

Become an apprentice – GOV.UK

Apprenticeships | Low Incomes Tax Reform Group

How Much Will you be Taxed as an Apprentice?

What is a working tax credit?

HM Revenue & Customs – GOV.UK

Income Tax – GOV.UK

Income Tax rates and Personal Allowances – GOV.UK

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