Large employers: Apprenticeships Levy
From April 2017 the Government is introducing a levy for Apprenticeships. Employers with wage bills of more than £3m will have to pay 0.5% of their wage bill into an electronic account, regardless of whether or not they employ apprentices. The Government will use this to fund the cost of Apprenticeship training and assessment.
Employers with wage bills of over £3m (approximately 2% of UK employers) will be directly affected by the introduction of the Government’s Apprenticeship levy as follows:
- The employers will pay levy contributions to HMRC on a monthly basis alongside usual PAYE payments
- Levy contributions will then be placed into an account on the Digital Apprenticeship Service
- The employer can access the funds in this account to purchase Apprenticeships training and assessment for their staff
- If the employer chooses not to purchase Apprenticeship training, their levy contributions will expire 24 months after they are deposited
- Levy contributions can only be used to pay for the training and assessment of apprentices that work in England. Apprentices in Wales, Scotland and Northern Ireland are subject to different systems
- The Government will automatically top-up any levy contributions by 10% so that employers get more out than they put in
- The Government are simplifying Apprenticeship funding by placing every Apprenticeship into one of 15 funding bands, ranging from £1500 to £27000
- All employers will receive an additional support payment of £1000 for employing an apprentice who is aged between 16 and 18. The training provider an employer works with will also receive an incentive payment of £1000 for delivering Apprenticeship training for a 16-18 year old.
- Support payments of £1000 will also be available to employers who take on a 19-24 who was formerly in the care of the Local Authority or who has an education health plan.