UK: employer NI relief for under-21s is about £0.5-0.8bn below HMRC, beyond missing apprentice flags #1374

Summary

On the current national release (microcosm-uk-2024-25-national-20261023T075039Z-a133f37a, policyengine-uk 2.147.2), the employer NI zero rate for employees under 21 costs about £1.42bn in 2025-26 (policyengine-uk#2505). HMRC's tax relief statistics (January 2026, Table 2) put the under-21 relief at £1.90bn and the apprentice relief, which already includes apprentices under 21, at £0.57bn.

Missing apprentice flags (#1372, draft fix #1373) can explain at most a few hundred million of the gap, because only apprentices aged 21 to 24 are missing. The rest, roughly £0.5-0.8bn, points at under-21 employees themselves: too few of them on the spine, too little earnings above the secondary threshold, or calibration absorbing them.

Suggested checks

1. Weighted count of employees aged 16-20 by age, and their mean and distribution of employment income, against HMRC RTI payroll statistics and ONS LFS/ASHE for 2025-26.
2. Share of under-21 employees with earnings above the secondary threshold (£5,000 from April 2025), since the relief is the employer NI they would otherwise pay.
3. Whether any calibration target binds or pulls on this group, and whether the take-up or multiple-jobs handling drops some of them.

Aggregates only. Related: #1372, #1373, policyengine-uk#2505.

🤖 Generated with Claude Code