Will your business pay an Apprenticeship levy?

Author // Vega Sims Categories // HR and Training

The Government is introducing a new Apprenticeship Levy starting from April 2017. The levy will affect employers with a payroll of more than £ 3 million a year and will be put in place to encourage organisations to invest in skills through Apprenticeships. How will Apprenticeships work for non-payers?

What and how will employers pay?

As it stands all employers with an annual payroll that exceeds £ 3 million will have to pay 0.5% of their payroll bill. This will be administered and paid through PAYE.

What will employers get?

Employers paying will receive one annual allowance of £15 000 to offset against their levy payment, which can be spent on Apprenticeship training. The Government has recently announced that levy payers will receive a 10 per cent top-up on their monthly levy contributions.

Levy funds will be held in a digital account and employers will be able to spend these funds with approved training providers to pay for Apprenticeship training.

You will be able to use your levy funds for existing staff, but there is an emphasis on new employees.

It’s important to note, if you don’t use your levy you’ll lose it and it will be allocated to other organisations.

How will I access funding if I don’t pay the levy?

Non-levy payers can still access Apprenticeship funding after the start of the levy in April 17, but how this will work has not been confirmed. We have requested more information on this and will publish any feedback as soon as we receive it from BIS.

How can your business prepare?

If you are already engaged with Apprenticeships, that’s great! However, we do suggest that you start to budget for the new levy in advance.

For those employers who don’t have an Apprenticeship programme in place, we advise that you set up a pilot Apprenticeship scheme this year so that you are able to make use of your funding next year.

TCHC currently delivers Apprenticeship programmes through the Apprenticeships Suffolk Business Service a free and impartial advice service for employers based in Suffolk.

In other areas we deliver Apprenticeship programmes in Health and Social Care, Team Leading and Management, Warehousing, Customer Service and Retail through our newly acquired OFSTED rated good training provider ATT.

For more information on the levy or if you would like to set up an Apprenticeship programme, please contact us on 01923 698 430.

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