What is the Apprenticeship Levy?
The Government is committed to growing and developing the UK workforce via the Apprenticeship programme. At present, government funding is available via colleges and training providers for the training of apprentices and it is down to individual providers if they choose to charge employers for the provision of apprenticeship training.
The apprenticeship Levy has been introduced as a way of ensuring that large employers are financially contributing to the growth in apprenticeship numbers and to increase investment in the apprenticeship programme, helping to build a skilled and experienced workforce for the future.
Employers with an annual pay bill of more than £3 million will need to spend 0.5% of their total pay bill on the apprenticeship levy.
If your total annual paid bill is less than £3 million you will not need to pay the apprenticeship Levy.
if you are a non levy payer you will have an annual pay bill of under £3 million.
If you are a non levy payer you won’t be paying into the apprenticeship levy or using new digital apprenticeship service to pay for apprenticeship training and assessment until at least 2018, however the way apprenticeships are funded will still be different for you.
Funding bands and co-investment
Every individual apprenticeship framework and standard will be allocated to a funding band. The upper limit of the funding band will cap the maximum price that government will ‘co-invest’ towards. The government will fund 90% of the agreed price for training and assessment, and you as the employer will pay 10%. You will be able to agree a payment schedule with us and spread your payments over the life time of the apprenticeship.
In the first year of the new system, employers will need to pay their co-investment share directly to training providers.
Small employer incentive
The government recognised that smaller employers have historically played a very important role in helping young and disadvantaged people into the workforce for the first time. This is why they are continuing to pay a grant to small employers to support them in taking on new apprentices aged between 16-24 years of age. This is called the Apprenticeship Grant for Employers 16-24. The AGE grant scheme will continue until the end of the 2016/17 academic year.
The government want to continue to support small employers to take on apprentices aged 16-18 so for employers with fewer than 50 workers the government will pay 100% of the apprenticeship training costs for these individuals. In addition to this they are extended this offer to small employers who take on a 19 to 24 year old apprentice who was formerly in care or has a Local Authority Education, Health and Care plan.
The government will pay £1,000 for each 16-18 apprentice that you take on to you as a non levy paying employer over two equal payments at 3 months and 12 months. Initially, the payment for the employer would be made via us. Over time, they intend to move to a system where you receive this payment directly from the government.
If you would like more information on the levy and how it will affect your business please contact us and we will happily get back to you to discuss further.