What is the Apprenticeship Levy?
The Apprenticeship Levy was introduced on 6th April 2017 and is a levy on UK employers to fund new apprenticeships. It provides a change in the way the government funds apprentices throughout England and has already began to take effect.
Who will be affected by the Apprenticeship Levy?
The apprenticeship levy affects employers in all sectors who are operating in the UK with an annual pay bill in excess of £3 million.
Here we discuss the new government apprenticeship levy in more detail and give you the answers that you’re looking for so that you can benefit from this investment by training apprentices.
What Every Employer Should Know
The recent changes in the Apprenticeship Levy means that the control of apprenticeship funding has been put into the hands of employers throughout the UK via the Digital Apprenticeship Service.
The way that it works is that the levy will be charged at a rate of 0.5% of an employer’s pay bill and each employer will receive an allowance of £15,000 to offset against their levy payment.
1. What if I Have an Apprentice Already?
For companies with apprentices who started an apprenticeship programme before 1st May 2017, you can continue funding training for them under the terms and conditions that were in place at the time the apprenticeship started. In other words, the way you fund training for them will not be affected, so you can continue as you were before.
2. Paying the Apprenticeship Levy…
For levy-paying employers, creating an apprenticeship service account online via the gov.uk website is the easiest way to gain services such as; receiving levy funds to spend on apprenticeships, managing your apprentices, paying your training provider.
3. What Can the Levy Be Spent on?
Many assume the levy fund can only be spent on new recruits, when in fact the levy can also be spent on apprentice training for existing staff. This is as long as the individual meets the apprentice eligibility criteria and the training meets the approved standards.
4. What Types of Programmes are funded by the Apprenticeship Levy?
There’s a wide variety of exciting training programmes that are funded by the Apprenticeship levy. From roles within Agriculture, Environmental and Animal Care such as Ecologist, Veterinary Nurse and Florist, to roles within Business and Administration such as HR Support, Recruitment Consultant and Supervisor. There are programmes available to suit different skill sets and different skill levels. You can find the full list of standards here.
5. Can I use an External Training Provider?
You can either use an external training provider, such as ourselves here at Sensible Training, or you can choose to deliver the training yourselves, but the training must be delivered by an approved provider.
The training contribution is paid to the organisation which trains the apprentice. Large employers with a direct training contract can receive training funding themselves or appoint a training provider to deliver training on their behalf.
6. How Do I use Funds from my Digital Account?
The funds from your digital account will be taken as monthly payments once your apprenticeship has started, these will then be sent directly to the training provider. This spreads the cost over the lifetime of the apprenticeship.
You will be able to see funds arriving in your digital account each month as you pay the levy, and funds being deducted from the account each month as you pay for training.
7. What Does the Apprenticeship Levy mean for Small Employers?
For smaller employers, you’ll still be able to access government support for Apprenticeships through the National Apprenticeship Service. If your company has a pay bill less than £3 million, the Apprenticeship levy will not apply to you.
We hope this helps to clarify any questions or concerns you may have had previously regarding the Apprenticeship levy. For any further questions, don’t hesitate to contact us directly.