What is the Apprenticeship Levy?
In spring 2017 the way the government funds apprenticeships in England changed, to help fund employer apprenticeship schemes. The Levy will be introduced at a rate of 0.5% of an employers payroll.
All employers will receive an allowance of £15,000 to offset against payment of the levy, which effectively means that the apprenticeship levy will only be payable if your payroll is over £3 million each year.
How it will affect your business
The Levy can be used to up skill existing staff or recruit & train new employees working towards an approved Apprenticeship Standard.
The Levy will apply to all large organisations with an annual payroll of over £3million per annum, regardless of whether they already employ Apprentices or not.
It will be payable by employers in the UK at the rate of 0.5% of the payroll cost through PAYE alongside Income Tax and National Insurance.
Employers will not pay the first £15k of the Levy, which effectively means that the Levy will only be payable on payrolls in excess of £3 million per year.
All employers will be supported by the government with regards to the Apprenticeship training.
Public sector organisations will also pay the Levy if their payroll meets the above criteria and in addition, 2.32% of their workforce must be Apprentices.
Example 1: an employer who would pay the levy
An employer with an annual pay bill of £5,000,000:
levy sum: 0.5% x £5,000,000 = £25,000
subtracting levy allowance: £25,000 - £15,000 = £10,000 annual levy payment
Example 2: an employer who would not have to pay the levy
An employer with an annual pay bill of £2,000,000:
levy sum: 0.5% x £2,000,000 = £10,000
subtracting levy allowance: £10,000 - £15,000 = £0 annual levy payment
NWCS Training can HELP
We are always endevouring to give a quality service to our customers, whether you currently employer an apprentice from NWCS Training or you are thinking about it then call on 0151 521 5888 or send us a message on the form below and we will contact you.
Latest news/updates: Draft Clause released – Feb 2016
The Government published draft clauses regarding the Apprenticeship in early February, you can view these documents here:
Update: May 2016