The Apprenticeship Levy is a UK-wide employment tax introduced by the UK Government that came into force on 6 April 2017. All UK employers, and employers with an annual pay bill of £3 million or more have to pay the Levy, and it’s collected by HM Revenue and Customs through the Pay as You Earn (PAYE) system.
Who has to pay the Levy?
The levy applies to employers in England, who have an annual pay bill above £3m.
How is the levy calculated?
The levy is 0.5 per cent of the annual pay bill.
All employers will receive a £15,000 annual allowance, to be offset against the bill. This effectively means that employers with an annual pay bill of £3m or less pay no levy.
How will the levy work?
The levy will be collected by HM Revenue and Customs monthly through Pay as You Earn (PAYE). It can then be accessed by employers through an online digital service account.
Employers can use the online digital service to pay for apprenticeship training for apprentices that work for at least 50 per cent of their time in England, which will be limited up to certain maximum funding bands. When the apprentice training starts funds (in the form of vouchers) will be taken from the account.
What about apprenticeship funding for businesses that do not have to pay the levy?
From May 2017 employers not paying the levy, who offer apprenticeships to 16 to 18-year olds, will receive 100 per cent of the cost of the training from the Government, up to the maximum funding bands.
Employers will have to pay 10 per cent of the cost of the apprenticeship training for those aged 19 and over and the Government will pay the remaining 90 per cent, up to the maximum funding bands. This support applies to all age groups.
For non-levy businesses with less than 50 employees there will also be a new £1000 incentive towards apprenticeships for taking on someone aged 16 to 18.
TVCC works closely with the British Chamber of Commerce who are members of the IfA’s key stakeholder panel and we have been asked to help the IfA identify where it needs to improve its systems and processes and how it can best communicate with businesses. Please contact firstname.lastname@example.org or call 01753 870500 with any suggestions or for more information.
The Institute for Apprenticeships ensures high-quality apprenticeship standards and advises government on funding for each standard. IFA is an executive non-departmental public body, sponsored by the Department for Education.
The Department for Education is responsible for children’s services and education, including early years, schools, higher and further education policy, apprenticeships and wider skills in England.
The Berkshire Apprenticeship Service is a one-stop shop for Berkshire-based businesses who want to know more about apprenticeships. They can provide you with information on apprenticeship programmes and the latest funding as well as help you find the right apprenticeship programme and training provider for your needs.