Will The Apprenticeship Levy Affect Your Business?
(Posted on 05/10/16)
If you have heard about the government’s plans to introduce an apprenticeship levy in April 2017, you might be concerned it could impact your business both financially and in terms of how you develop your workforce. The aim of the levy is to give employers greater control of their apprenticeship training budget. It can, at first glance, seem confusing but it may well be that only approximately 2% of UK companies will be required to pay the levy. Employers not paying the levy will be asked to contribute 10% to the cost of apprenticeship training and the government will pay the rest. This is referred to as ‘co-investment’. Below is a summary of some of the main changes:
- Apprenticeships will no longer be restricted to prospective employees and young students. Existing employees can now advance and prosper by embarking on an approved apprenticeship scheme.
- Only employers with a payroll in excess of £3million will pay of the levy. This makes up approximately 2% of UK businesses.
- The levy will be applied at a rate of 0.5% of the wage bill or total employee earnings. A levy allowance of £15,000 per year will be provided to offset against the levy you are required to pay.
- Levy paying employers will receive a 10% monthly top-up from the government.
- The levy will be collected via the PAYE system on a monthly basis.
- Employers with a payroll of less than £3million will not have to pay the levy. They will benefit from co-investment, which means for every £1 paid by the employer towards the cost of the apprenticeship, the government will contribute £9.
- The levy funds can only be spent on training with approved training providers.
- A £2,000 incentive may be made available for 16-18 year olds, young care leavers and young people with an Education and Health Care plan. This incentive is split evenly between the employer and training provider. Employers with fewer than 50 employees will not have to pay towards the cost of training 16-18 year old apprentices, young care leaver or young person with an EHC plan. This is yet to be confirmed.
For more information and guidance about the Apprenticeship Levy, please contact us by calling 01978 806 285 or emailing firstname.lastname@example.org.
call 01978 806 285 or email email@example.com