Covid-19 has turned the whole world upside down over the last year and a half, and it has sent billions of businesses into a scramble to keep their once stable companies afloat during unprecedented times. We have now endured over a year and a half of fluctuating economy, lockdown after lockdown impacting footfall and sales, and uncertainty that has made its mark on each and every business in the world. But now the world is starting to recover, many businesses are looking for a boost to help them recover from the difficulty and return to that healthy, pre-pandemic state.
The government has stepped in to offer many different kinds of support over the year, and just one of them is the Kickstart Scheme. This is specifically designed to help business owners hire new employees by giving them financial support and incentive. But how does the scheme work, and what do you need to know before you apply?
What is the Kickstart Scheme?
The Kickstarter Scheme is just one of the governments solutions to the number of employment problems caused by the pandemic. The idea is to fix both staffing problems caused by the lockdowns, and to provide young people with job opportunities they have not had access to over the last year and a half. In the first 3 months of the scheme being open, over 19,000 job placements were created, which is why the end date for applications has been extended. The idea behind the scheme is beautifully simple. The government will provide funding to businesses who will employ 16–24-year-olds to cover the cost of training and employing them for a set amount of time. This gives the business access to new employees without a heavy financial burden in difficult times and provides young people with the chance to earn money, learn new skills and gain valuable job experience.
If you are an employer using this scheme, the government will pay:
- 100% National Minimum Wage for 25 hours, for a total of 6 months.
- Associated employer NI contributions.
- Employer minimum automatic enrolment pension contributions.
- A grant of £1,500 per job for setup and training costs.
The package really is as good as it looks, and thousands of UK businesses have already signed up. The scheme will remain open for applications until the end of 2021, so if you are looking for a way to boost the recovery of your business in the post-pandemic world, this is one of the best ways to go about it without taking a big hit to your cashflow.
Qualifying for the scheme
As with any government aid, there are a few qualifying criteria you need to meet in order to get funding. Specifically:
- The jobs created with the Kickstart Scheme funding must be new jobs. They cannot replace existing or planned vacancies, or cause existing employees, apprentices or contractors to lose work or have their hours reduced.
- The jobs must:
- Be a minimum of 25 hours a week, and last 6 months
- Pay at least the National Minimum or National Living Wage for the employee’s age group
- Only require basic training
- For each job you must help the young person become more employable in the future. This could include:
- Looking for long-term work, including career advice and setting goals
- Support with CVs and interview preparation
- Developing skills in the workplace
If you meet all those criteria, then you qualify for the Kickstarter Scheme, and can apply to get your grant as soon as you like.
Signing up
If you’ve gone through the above list and you think you might qualify for the scheme, then signing up is thankfully a very simple process, but you will need to provide a lot of information during the application – including the job roles you will be creating with the funding, with all the detail asked above.
You can do this yourself using the government portal, or you can choose to sign up using a Kickstarter partner who is already registered and using the gateway. This is similar to using a partner to manage your VAT with Companies House. We recommend going down this route as it means you can go through all the information with an expert, they can help you with any complicated questions, and you can be sure the information you are providing is correct, so you will not be refused on a technicality.
Why sign up?
If you are still not sure why you should sign up to the scheme, particularly if your business has stayed relatively afloat during the last year and a half, then we have a few suggestions for you. Because the scheme offers much more than just funding to hire an employee. It also allows you to:
Bounce back from Covid: Almost every business in every sector has been impacted by Covid-19, and many have had to let employees go in order to stay above water. Running on a skeleton crew might have been fine during the pandemic, but now that restrictions are eased and the world is returning to normal, businesses are finding they need to ramp up their resources again. The Kickstart scheme gives you the ability to hire new employees and kickstart your recovery without taking a big financial hit to do so.
Extra resources: Even if your business didn’t hire anyone before the pandemic, there are plenty of new tasks in a post-pandemic world that might leave you feeling a little short-handed. The Kickstart scheme gives you the ability to hire just one, or even multiple people to help you with that extra load, adjust to a new way of working, and generally fill in the gaps while you get back on your feet. And even if you are not struggling, you can now hire someone to do the jobs you previously couldn’t afford to hire someone to do!
Give back: Of course, the scheme is not available for just any employee, and that is for a very good reason. Over the last year and a half there have been thousands of young people leaving school or graduating college, and they have found it almost impossible to get work during the pandemic. This lack of work experience could impact their future. But by hiring them through the Kickstart Scheme, you are giving them work experience, further education in your industry, and allowing them to kickstart their own career (potentially even with you). The Kickstart Scheme is as much about nurturing the next generation as it is about supporting UK businesses.
Get your house in order first
If you are going to apply for the Kickstarter Scheme, one thing we would recommend you do beforehand is a thorough audit of your accounts. This is mainly to make sure you have everything in order and you are doing things in the right way, because the DWP will be checking you are using the grant money properly. Specifically, if your payroll is not correct, then you risk your funding not being sent, and having to foot the bill for your young employee yourself. The £1,500 per job grant for start-up costs and training will only be paid to you when you tell the DWP that your young person has started, and there is evidence they are on your payroll. You can find more information about the pay schedules for the scheme here.
If you are successful in applying, the funding will be sent to you in one of two ways. It will either be sent to you directly by the DWP if you applied yourself, or it will be sent to your Kickstarter partner if you used one. Once funding has begun, the DWP will use information from HMRC to check that your young person is being paid through PAYE every 30 days. If they are, then funding will be sent to cover the previous 30 days. That is why it is so crucial to have your payroll correct before you even start applying. If you are not sure how to do this, or would like some impartial help, please get in touch with us.
At Purple Lime, we provide a wide range of services to businesses around accounting, payroll and corporate finance. We have already helped many businesses get started on the government Kickstart Scheme, and we would love to help you gain access to it to. If you would like to know more, please get in touch by emailing hello@purplelime.uk.com or calling us on 01249 263 333.