Fancy taking on an Apprentice – It Could Take You Outside IR35

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Apprentice to IT Contractor
Apprentice to IT Contractor

Apprentice Scheme

The Government, along with charity Business In The Community, have set up an IT Apprentice scheme. Logica, Siemens, Accenture, Steria, Capgemini, CSC and Fujitsu have all signed up for it.

It is to help students further their careers in IT.

There are 6 standardised roles, i.e. project management, business analysis, software development, testing, networks and IT Support.

Perfect IT Project
Perfect IT Project – the factors that make a great project

I‘m sure that there are very strict rules in place that have to be adhered.

It is a Government scheme so there is always red tape.

It may be that contractors can qualify to take on apprentices via this scheme or they may not.

One company takes them on for 3 months training and then 9 months in the workplace.

Contractor Old Days

All the old apprentice schemes paid little money to the apprentices whilst they got on-the-job work experience.

Many companies took on students studying for IT degrees during their long summer holidays at a cut price. It suited both parties and often the students ended up with those companies when they finished their degrees.

There‘s no reason that contractors couldn‘t take on apprentices on the same basis.

They could either take them on straight after they got their degree or they could take them on during the university holidays – which is pretty much half the year.

Outside IR35

I would have thought that apprentices would be happy to take a couple of hundred a week to work for an IT Contractor which is nothing to someone earning £300 to £600 a day.

Employing an apprentice would take you right out of iR35 so the costs of doing it would be easily recovered by being outside of IR35 instead of inside it.

kind of client
The kind of client you want to work with

They reckon that the difference in tax paid by someone inside IR35 and someone outside of it is about £10,000 a year so you would be getting the apprentice for free.

The apprentice would lose the advantage of working for a ‘name‘ company but in all other respects they would learn a lot more from working closely for a contractor.

Apprentice Hired Out

Once the student has got up to speed, and the client they are working for thinks the student is good, the contractor could suggest that the company hires the apprentice through the contractor to do some work for them.

Then the contractor would be quids in.

And once you‘ve sold one person to a company there is the opportunity to sell more.

Finding an IT Apprentice

So, how does one find an IT apprentice?

All it takes is to put an ad in the national student jobs magazine (I can‘t remember its name).

I remember putting an ad in for graduates for a client I was working for and the ad cost £750.

However, we got 900 CVs from students looking for jobs at the company – which is less than a quid a reply.

Apprentice Graduated

Of course, if you were taking an apprentice on after they had graduated it might cost more.

However, although most of them would want to take the higher salaries at ‘name‘ firms, there would almost certainly be some who you could sell the idea to that this would be the best way to start their careers, i.e. working with you.

You could tell them that they would start low but that there would be more rapid progression through working with you.

Contractors are the Goose
Contractors are the Goose that lays the golden egg

After all, once they are up to speed, you could potentially sell them on at low contract rates, by yourself to clients you know – or even through an agency.

Beneficial to Contractor

Taking on low-cost apprentices is not something that contractors usually consider but it could turn out to be highly beneficial to both contractor and apprentice.

Tell me, at the start of your career, if you had the choice of going to work for some company or learning hands on by working beside an IT contractor, which do you think would have been best for you long term?

You would certainly have been able to move into contracting earlier.

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