From 1 October small businesses can receive £2,000 each 16-24-year-old apprentice they recruit.

The incentive is available for all UK-based employers who do not currently pay the Apprenticeship Levy. 

Apprentices must be included on the employer’s PAYE scheme and apprenticeship service account to receive the automatic payment.

It can also be backdated for apprentices that have joined the business within the last three months.

The inventive will be paid in two instalments of £1,000 after 90 days and after 365 days as a direct cash payment.

Kiran Kapur, CEO of Cambridge Marketing College, said the incentive makes hiring an apprentice even more attractive for employers.

She said: “It is now even more attractive than ever for smaller businesses to hire an apprentice. Not only do they receive government-backed and funded training free of charge, but employers can now also receive a £2,000 boost for every apprentice they hire.

“Traditional education routes often leave young people with plenty of theoretical knowledge, but little practical day-to-day work skills. Apprenticeships can act as a solution to this problem, blending on-the-job training with learning. 

As apprenticeships can be tailored toward your specific business needs, targeted training addresses and skill-gaps you may have, as well as helping your team feel valued and with a clear structured pathway for career progression.

“There are currently 939 apprenticeships available to employers, across a massive range of job roles and industries. Whatever knowledge, skills and abilities are needed to help your team meet their objectives, there is usually an apprenticeship to fit.”

The new inventive is in addition to existing financial boosts for employers, including £1,000 to support apprentices in the workplace at the start of their training for young apprentices, and no Employers National Insurance payments for apprentices under the age of 25.

For small and medium sized businesses there is no contribution to pay towards the training costs for apprenticeships. The government will fully fund training for all apprentices under the age of 25. 

For older apprentices, over the age of 25, smaller employers will have to cover 5% of training costs.

The UK government provides apprenticeship funding for larger businesses via its Apprenticeship Levy. Apprenticeships within levy paying businesses (those with an annual salary bill of over £3m) are fully funded out of their levy pot.