With the Apprenticeship Levy 2017 changes just around the corner, we understand that as an employer the changes can seem confusing. Therefore we have created the following guide to provide you with the ultimate guide with what the Apprenticeship Levy changes mean for you.
What is the Apprenticeship Levy?
In April 2017 the government will implement a new Apprenticeship Levy on large employers, to fund new apprenticeships. UK based employers with a pay bill over £3 million are required to invest in Apprenticeships.
How does it work?
Employers will pay a levy which is expected to be 0.5 per cent of your pay bill. This will be paid into a central fund where you’ll access vouchers to fund the training of your own apprentices. You’ll receive an allowance of £15,000 to offset against your levy payment.
Why Apprenticeships matter?
Apprenticeships are beneficial to employers for many reasons such as:
- Increasing employee satisfaction
- Increasing staff loyalty
- Reducing recruitment costs
- Better serving your customers
- Being a leader in the cultivating the next generation of workers.
What does the Apprenticeship Levy mean for you?
I have… less than 50 employees and a salary bill of under £3 million
If you have less than 50 employees and a salary bill of under £3 million then you will receive fully funded free training. To add to this, funding is also available to train up existing staff or recruit apprentices. There is also a £1,000 cash incentive for recruiting an apprentice aged between 16-18.
I have…over 50 employees and a salary bill of under £3 million
If you have over 50 employees and a salary bill of under £3 million then you will be expected to contribute 10% of total training costs (monthly installments). There is also funding available to train up existing staff or recruit apprentices. Additionally, there is a £1,000 cash incentive for recruiting an apprentice aged between 16-18.
I have…a salary bill of over £3 million
If you have a salary bill of over £3 million you will be expected to contribute 0.5% of your annual salary bill into the Apprenticeship Levy. This will allow you to train existing staff or recruit apprentices using funds that will be located in your digital account. After 18 months these funds will expire. You will get out more than you put into the apprenticeship levy as for every £1 that you put into your digital account you get £1.10 to spend.
If you would like to talk to somebody…
To find out more how we can support you with the Apprenticeship Levy changes and what it may mean for your business, don’t hesitate to contact us today and we will be in touch.