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 af​fect 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.

Levy Calculations

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

Apprenticeship-levy-how-it-will-work