Apprenticeship Levy Support For Employers

Apprenticeship Levy

The way Government funds Apprenticeship Training has changed.

From April 2017 any employer with an annual payroll of over £3m will pay into the Apprenticeship Levy to fund their Apprenticeship Training. The funds available through the Apprenticeship Levy can only be spent on Apprenticeship Training, it does not cover the salary costs of employing Apprentices.

Those with a payroll less than £3m annually will be required to pay 10% of the costs towards Apprenticeship Training.

The Apprenticeship Levy is a tax against all businesses, however given there is a £15k tax allowance, it means only those employers with a payroll over £3m annually will pay into the Levy. The Levy is calculated at 0.5% of your total salary bill (including wages, bonuses and pension contributions) less the £15k allowance The payments started in April 2017 through the monthly HMRC returns.

The Government will top up each monthly Levy payment by 10%, to increase the amount of funds available to spend on Apprenticeship Training.

The funds are transferred to your chosen Apprenticeship Training Provider through your Apprenticeship Digital Account, which will also allow you to manage the budget by entering the best price negotiated with the Training Provider and stopping/suspending payments where staff leave or the training received is inadequate.

Apprenticeship Training is changing, the current Apprenticeship Frameworks are being replaced by Apprenticeship Standards that have been developed by employers to be sector specific. The new Apprenticeship Standards have an independent end assessment, which will be graded as fail/pass/merit/distinction

Connect 2 Training can advise all businesses how to train their staff before and after these changes are implemented.

________________________________________________________________________________________________________________________________

What do I need to know?

How do I pay my Apprenticeship Levy- for those businesses with an annual payroll of over £3m, the amount payable is 0.5% of each monthly payroll less the £1250 monthly allowance, first payment scheduled for May 2017. The Levy paid to HMRC is then transferred into your new Digital Apprenticeship Account (available from January 2017) to spend on Apprenticeship Training
How does the Apprenticeship Levy work across the UK- The amount available to spend on Apprenticeship Training through the Levy will depend on the percentage of your workforce that lives in England (determined by HMRC), it has not yet been announced how the system will work in Scotland, Wales & Northern Ireland as Skills (including Apprenticeships) is a devolved budget
What can the Apprenticeship Levy fund- The Apprenticeship Training can be used for newly recruited staff or existing employees, with training delivered by organisations approved onto the Register of Apprenticeship Training Providers
Does each Apprenticeship cost the same– there are 15 funding bands ranging from £1,500 to £27,000 we can advise you on the costs for the programmes suitable to your business
Are there any financial incentives- There is a £1,000 incentive payable to employers who train 16-18 year old Apprentices, or those aged 19-24 on an Education & Health Care plan, this is payable in 2 equal instalments at months 3 and 12
What happens to my existing Apprentices – they will be funded to complete their Apprenticeship on the current system, they can progress to a new programme funded by the Apprenticeship Levy post May 2017
What if I don’t have enough funds in my Digital Account to pay for the training- When buying Apprenticeship Training you don't have to have enough funds in your Digital Apprenticeship Account to cover the full cost of the training, the monthly payment system spreads the cost over the lifetime of the Apprenticeship (Training Providers are paid 80% of the funds in equal instalments across the duration of the programme, and 20% when the Apprentice sits their End Point Assessment). If within any month the payments to Training Providers exceed the funds in your DAS account, you will need to pay 10% of the overspend (the Government pays the remaining 90%).
What if we’re not ready to start Apprenticeship Training in May 2017- The funds will be available to spend on Apprenticeship Training for 2 years, after this point the funds expire. The Apprenticeship Digital Account will use funds on a first-in/first-out basis

How we support you with the Apprenticeship Levy

Connect 2 Training can help you prepare for the Apprenticeship Levy by:

offering advice, support and guidance on the Apprenticeship Levy and the benefits to your business
calculating the amount you will be paying to HMRC annually, and the amount of funds you will be able to spend on Apprenticeship Training
creating an implementation plan looking at current Apprenticeship programmes, recruitment needs and current/identified training needs across all job roles against your Apprenticeship Levy budget, this should be viewed as part of a wider Workforce Development Plan
developing proposals on the Apprenticeship Training that Deere Apprenticeships can deliver to benefit your business in line with the implementation plan
acting as your lead provider managing all Aprpenticeship delivery, even when we identify another training provider is better positioned to deliver a training need

To arrange a consultation visit please call Faye Stevenson (07388319353) faye@connect2training.co.uk