Apprenticeship Levy (England only)
From May 2017 funding for apprenticeships in England is changing. Employers with an annual payroll over £3million will be required to contribute to a new Apprenticeship Levy and all employers and training providers will see changes to the funding for apprenticeship training.
From May 2017 funding for apprenticeships in England is changing. Employers with an annual payroll over £3million will be required to contribute to a new Apprenticeship Levy and all employers and training providers will see changes to the funding for apprenticeship training.
In order to understand more about the Apprenticeship Levy, here is some useful information:
Paying the Levy
From 6th April 2017, all employers with a payroll over £3m per year will pay a rate of 0.5% into a digital account. Employers in England who pay into the Levy will be entitled to more than they paid in with a 10% government top‐up to their accounts. The first of the funds will be in the digital account late May 2017 after the employer has completed their RTI submission for April 2017.
Example:
An employer of 250 people with a gross salary of £20,000 each:
Pay bill: 250 x £20,000 = £5,000,000
Levy : 0.5% x £5,000,000 = £25,000
Allowance of £15,000 = £10,000
£10,000 annual payment
Note: This allowance is not a cash payment and cannot be used to purchase apprenticeship training and funds will expire 18 months if not spent on apprenticeship training.
Purchasing Training
All apprenticeships that start before 1st May 2017 will be funded through to completion via the existing funding rules. Employers who pay into the Levy and wish to purchase training after 1st May 2017 will be able to select a training provider and an apprenticeship programme of their choice. This funding will automatically leave the employer's digital account each month and will be spread over the lifetime of the apprenticeship.
Note: The government have proposed to detain 20% of the total cost which will be paid on the apprenticeship completion.
Digital funds and Government funding can be used for:
Apprenticeship training and assessment against an approved Framework or Standard
An approved training provider and assessment organisation (up to the funding band maximum).
Digital funds and Government funding can NOT be used for:
Travel and subsistence costs
Work placement programmes
The costs of setting up an apprenticeship programme.
What's Next?
Final funding bands and rules published October 2016 of the funds will be in the digital account late May 2017 after the employer has completed their RTI submission for April 2017.
HMRC publish detail guidance for employers on Levy payments December 2016.
Quick links
