The Apprenticeship Levy is now in place and a number of UK employers can take advantage of all the benefits it brings! But what is the Levy? Does it actually effect your business? Our Q&A video and questions below will explain what the Levy is and what it means to you and your organisation.
The Apprenticeship Levy is a UK Government employment tax that came into force on 6 April 2017. It has been introduced with the aim of funding Apprenticeships and all UK employers (public, private and third sector) with annual salary bills of more than £3 million will pay the levy.
The levy is set at 0.5% of an employer’s annual wage bill and each month, HM Revenue and Customs (HMRC) will collect the Levy through Pay As You Earn (PAYE), payable alongside income tax and National Insurance.
Your total pay bill will be based on total employees earning subject to Class 1 secondary NICS therefore if you have an annual pay bill of over £3m then you will be in scope to pay the Levy. However, if your organisation is part of a group you might find that you’re still liable to pay the levy even if your individual organisation’s pay bill is under £3m. Find out more by visiting calculating and paying the levy via the HMRC.
Yes. All employers will still be able to access funding for approved Apprenticeships. YouTrain work with a large number of SMEs and understand that Apprenticeships are an essential way to develop their employees.
The Levy will be paid by employers across the whole of the UK. If you operate across different parts of the UK you will pay your contribution based on your total UK Wage Bill, with contributions directly proportional to wage split between countries.
In Scotland there is no limit on how much Apprenticeship funding you can take advantage of. For example, if you have a Levy bill of say £20,000 but want to utilise Apprenticeship funding to take on 3 x IT Apprentices at £8,200 each, upskill the 2 younger members of your Marketing team with the Digital Marketing Diploma at £3,200 each and put your Office Applications specialist on the Digital Applications Diploma at £3,200 (total cost of the 6 x training programmes would be £34,200) then you would still be able to do so, despite your levy contribution falling well short of the required amount.
England have different administrative arrangements for funding Apprenticeships than in Scotland.
In England, funding for Apprenticeship training will be administered through a digital apprenticeship system for Levy paying employers. There are no plans to adopt this system in Scotland, and Apprenticeship funding will continue to be administered by SDS through contracted training providers and direct employer contracts.
Yes, but there will be a 10% Employer Contribution, and the 10% will be on the negotiated rate that is agreed between You Train and the Employer.
For levy-paying Employers funds are managed through the Employer's Digital Account and if their levy funding pot runs out, they will be able to access government funding via the 10% Employer contribution route - this is unlimited.
We can work with you to provide further information on the Levy and how to get the most from it. You don’t have to wait until you pay the levy – contact us today on 01786 478 478 to explore your Apprenticeship options!