The Apprenticeship Levy
The apprenticeship levy is a government initiative to fund apprenticeships and will only be payable for employers with a total wage bill in excess of £3 million.
The government has committed to 3 million apprenticeship starts in England by 2020. The levy has been created to fund this commitment, and to encourage employers to hire more apprentices to help address skills gaps in the UK.
Are you a Levy Paying Employer?
The levy will be paid by employers with a pay bill of over £3m from April 2017, which is less than 1.3% of employers in the UK.
The levy will be at a rate of 0.5% of your total annual wage bill and will be paid through PAYE regardless of whether you already employ an apprentice.
The funds will be accessed through a new Digital Apprenticeship Service which sets up each levy paying employer with a digital account. If you are a levy payer, you will be notified by the HMRC who will also share the value apportioned to your account.
The funds will appear in your account monthly and government will apply a 10% top up payment and Levy funding can only be spent on apprenticeship training and assessment with approved providers like LEMA. i.e. if your levy value = £10,000, the government will apply £11,000 to your digital account.
What if you’re a Non-Levy Paying Employer?
With greater than 50 x employees:
90% of non-levy paying employers’ apprenticeship training and assessment costs in England will be paid for by the government. The government will ask these employers to make a 10% contribution to the cost, paid directly to the provider, and the government covers the rest. This cost will be spread over the lifetime of the apprenticeship.
With less than 50 x employees
The government is offering additional support to organisations with fewer than 50 employees by paying 100% of training and assessment costs for their apprentices aged 16 to 18 and for those aged 19 to 24 formerly in care or with a local authority education, health and care plan.