The Apprenticeship Levy

 

The introduction of the new Apprenticeship Levy in April 2017 has changed the way Apprenticeships are funded and how businesses like yours will work with training providers like us.

What is an Apprenticeship Levy?

In July 2015 the Government announced the introduction of an Apprenticeship Levy, which businesses started paying in April 2017.

The Levy is designed to encourage employers to embrace Apprenticeships as a way of meeting their current and future skills needs. It will fund Government’s ambition to support 3 million high quality Apprenticeships over the life of the current Parliament, i.e. 2015 to 2020.

 

Who will pay the Levy?

All employers in the UK with a pay bill greater than £3 million each year will have to pay the Levy.

 

How much will I have to pay?

The Levy is charged at 0.5% of payroll for employers with a pay bill greater than £3 million.

How is the Levy collected?

The Levy is collected monthly through Pay As You Earn (PAYE) alongside Income Tax and National Insurance.

How will I be able to access my Levy?

You will be able to manage your Levy through an account with the Digital Apprenticeship Service. The Digital Apprenticeship Service will enable you to:

  • See Levy funds you have available and spend with a registered training provider in England

  • Select Apprenticeship frameworks and / or standards you want to use

  • Confirm the training provider(s) you want to use to deliver your apprentices’ training

  • Confirm the price you’ve agreed with your training provider

  • Pay for Apprenticeship training and assessment

  • Choose an assessment organisation

  • Post Apprenticeship vacancies.

If you have not already registered with the Digital Apprenticeship Service, please do so as soon as possible.

Funds you don’t use will expire 24 months after they enter your account. For example, funds entering your account in September 2017 will expire in September 2019. Payments from your account to your training provider always use the oldest funds first.

What about Non-Levy employers?

Non-levy paying employers will share the cost of training and assessing their apprentices with government - this is called ‘co-investment’.

The co-investment rate has changed for new apprenticeships starting on or after 1 April 2019. Non-Levy employers will now pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.

All apprenticeships that started before 1 April 2019 will be at the previous co-investment rate of 10%.

 

If you do not pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least mid-2019, unless you are receiving a transfer of funds from a levy paying employer.

Instead, you’ll need to agree a payment schedule with the provider and pay them directly for the training.

Help & Guidance:

Apprenticeship Levy- How will it work? - https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

Guidance for Non-Levy Employers - https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work#non-levy-paying-employers

Employing an Apprentice - https://www.gov.uk/take-on-an-apprentice

Find Apprenticeship Training - https://findapprenticeshiptraining.apprenticeships.education.gov.uk

Apprenticeship Funding Rules https://www.gov.uk/guidance/apprenticeship-funding-rules

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