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How it affects me: The Apprenticeship Levy

<a href='http://nelep.co.uk' target='_blank'>North East LEP</a>

Created by North East LEP , 22nd March 2017

8 MINUTE READ


Coming in to force in April, with payments beginning in May, it’s important for all businesses who employ people to know what the Apprenticeship Levy means to them, and how they can make the most of it to upskill and retain key people in their workforces and provide new opportunities for new apprentices which provides on-the job learning whilst earning a salary.

What is it?

The Apprenticeship Levy is the Government’s initiative to fund three million places for apprentices by 2020, paid for by larger employers. It will give employers more control over designing, choosing and paying for apprenticeship training.

The funding can be used to train existing staff, or to recruit new apprentices, and for qualifications right up to degree level.

All employers will have an Apprenticeship Levy allowance of £15,000 each year. If you are a charity, or your company is connected to another, the rules may apply differently and you should take a look at the full guidance on the Gov.uk website.

Employers with an annual wage bill of more than £3 million will pay the Levy.

For more information on apprenticeship providers, take a look here.

How does it affect my business?

This depends, on how much your annual wage bill is, and how many full-time staff you employ. Click on the option that fits your business to find out.
 

                  

 

 

The Levy will be introduced on 6 April 2017 and will be charged at a rate of 0.5% of your wage bill, paid through PAYE on a monthly basis. Your first payment should be made in May.

It applies to all employers in all sectors across the UK. There are no exemptions, even if you contribute to an existing levy.

Where will the funds be?

Once you have declared the levy to HMRC, you will be able to access funding for apprenticeships through a new apprenticeship service account.

The amount in your apprenticeship service account will be how much you have available to spend on apprenticeship training in England.

Every business will have an annual levy allowance of £15,000.

The Government will apply a 10% top-up to all funds entering your account, to be to spend on apprenticeship training in England, each month.

That means for every £1 that enters your account to spend in England on apprenticeship training, you get £1.10.

Funds will expire 24 months after they enter your apprenticeship service account unless you spend them on apprenticeship training with a training provider.

How can I use the funds?

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017.

You can only spend the funds in your apprenticeship service account or access Government support for apprenticeship training delivered by an approved training provider.

Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold.

From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills, including graduates, if the training is materially different to previous qualifications or an apprenticeship.

This give you far greater flexibility to upskill your existing workforce, as well as taking on new workers.

 

You will need to contribute 10% of the cost of training, and the Government will ‘co-invest’ by paying the remaining 90%.

There is an incentive £1,000 payment available, for each apprentice aged 16-18 you employ.

The existing method of paying funding directly to training providers will continue; you will move onto the Government’s digital platform at a later date.

Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold.

From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills, including graduates, if the training is materially different to previous qualifications or an apprenticeship.

This give you far greater flexibility to upskill your existing workforce, as well as taking on new workers.

 

Businesses with under 50 employees won’t pay anything towards the cost of training apprentices who are aged between 16 and 18. When aged 19+, they will need to pay 10% of the cost.

There is an incentive £1,000 payment available, for each apprentice aged 16-18 you employ.

The existing method of funding directly to training providers will continue; you will move onto the Government’s digital platform at a later date.

Now and in the future, you can train any individual to undertake an apprenticeship at a higher level than a qualification they already hold.

From May 2017, an individual can be funded to undertake an apprenticeship at the same or lower level to acquire substantive new skills, including graduates, if the training is materially different to previous qualifications or an apprenticeship.

This give you far greater flexibility to upskill your existing workforce, as well as taking on new workers.


<a href='http://nelep.co.uk' target='_blank'>North East LEP</a>

Created by North East LEP , 7 months ago, [last edited 2 months ago]