The new apprenticeship levy
Top 100 Employers Through apprenticeships, employers can attract high-calibre candidates to their business; as well as nurture talent from within.
Apprenticeships bring the opportunity to strengthen and diversify the workforce, providing a future talent pipeline tailored to business. Apprentices bring enthusiasm and a fresh perspective, with 89% of employers saying that apprentices make their business more productive.
Employer-led apprenticeship reforms are making apprenticeships even more valuable to employers by putting them in control of apprenticeships – through taking control of the development of apprenticeships, choosing the skills, training organisation, apprentice and how the apprenticeship is delivered - to ensure it meets their organisational needs.
These apprenticeship reforms include changes to how apprenticeships are funded. This spring, all employers operating in the UK will be subject to an apprenticeship levy. The government has agreed an allowance for employers with an annual pay bill less than £3 million will not contribute to the levy.
The levy operates across the UK, arrangements are in place for those employers that operate in Scotland, Northern Ireland and Wales.
89% of employers say apprentices make their business more productive
Where several employers are connected as a group, only one £15,000 levy allowance can be used. Groups of connected employers must decide what proportion of the levy allowance each employer in the group will be entitled to.
With the changes to apprenticeship funding imminent, there are some things employers must do to now.
If you have a pay bill, or are connected to a group with a collective pay bill of more than £3 million, then you should:
- Start planning how you could use apprenticeships in your organisation.
- Read the updated guide for employers on paying the levy, accessing the digital apprenticeship service and paying for apprenticeships in future – more information is available on gov.uk.
- Use the online tool for employers to calculate your levy contribution, begin to plan your training and estimate what you will have available to spend on apprenticeships. The online tool is accessible on gov.uk
If you are employer, or group, with a pay bill of less than £3 million then:
You will be classed as a non-levy paying employer. In England, the government will pay ninety per cent of your apprenticeship training and assessment costs. You will cover the additional 10 per cent as well as any additional costs you agree with your chosen apprenticeship training provider.
The government is offering additional support to organisations with fewer than 50 workers by paying the full cost (100 per cent) of training and assessment costs for their apprentices aged 16-18 and for those aged 19-24 formerly in care or with a local authority education, health and care plan.
All employers in England will have access to a new, easy to use digital apprenticeship service that will help support them to manage their apprenticeship programme. From May 2017 levy-paying employers will be able to access funding for apprenticeships through their digital apprenticeship service account.
These funding changes come in to effect from April 2017. Search on gov.uk for ‘Apprenticeship reforms: information for employers’ and take action today.