• Employers

Apprenticeship Levy

Ten Questions Employers Need to know the Answers to:

1. What is the Apprenticeship Levy?

The Apprenticeship levy is being introduced by the government to pay for apprenticeships. Not all employers will pay the levy but all employers will be asked to contribute towards the training of their apprenticeships.

2. When will the Levy be introduced?
The levy will come into effect in April 2017 and will be 0.5% of an employer’s pay bill taken by HMRC. A £15,000 allowance for all employers means that the levy will only need to be paid by employers with a wage bill of £3,000,000+

3. How many employers will need to pay the levy?

The majority of employers are known as ‘small and medium’ sized businesses and it is only about 2% of all businesses that are currently effected.

4. How can I work out if my company will pay the levy?

Employers will pay 0.5% of their payroll costs on a monthly basis. The employers will receive a £15,000 allowance and the government will also top up the their levy fund by an additional 10% of matched funding.

An example of a non payer would be as follows:-
An employer with an annual wage bill of £2,000,000 x 0.5% = £10,000 in their levy pot. However if you take off the government levy allowance of £15,000 = £0 to pay

An example of a levy payer would be as follows:-
An employer with an annual wage bill of £5,000,000 x 0.5% = £25,000 in their levy pot. Take off the government levy allowance of £15,000 = £10,000 to pay (this is taken monthly and added to the ‘levy pot’ and the government adds another 10% contribution).

The government has created an on-line levy calculator – here is the link to the web page   https://estimate-my-apprenticeship-funding.sfa.bis.gov.uk/

5. Who can benefit from training through the levy pot?

Existing employees can benefit from apprenticeship training at a level to suit their skills level and training needs; apprenticeships are available from level 2 (equivalent to GCSEs) to level 6 (equivalent to a degree). You can also take on new staff as apprentices who can benefit from training fine-tuned to your organisation’s needs.

6. How do I pay the training provider?

All levy paying employers will have a Digital Apprenticeship Service Account. You will use this to pay for all the training and assessment for all your company’s apprentices. This service also helps you to find the best training providers who will help deliver your apprenticeship training.

7. What if I already pay into an industry levy?

You will still be required to pay the apprenticeship levy. However the Industry Training Boards will be consulting with their members on potential changes to their levy arrangements.

8. What do the levy funds cover?

The levy funds can only be used towards the cost of apprenticeship training and end point assessment once the apprenticeship finishes and must be with an ‘Approved’ training provider. The levy cannot be used to pay apprentice wages or the costs of setting up an apprenticeship programme. However employers taking on a 16 year old apprentice will receive £1000.

9. What do I have to pay for apprentice training if I am not paying the levy?

The government is currently consulting on the rate non levy paying employers will need to pay towards apprenticeships and 10% is currently under discussion; different apprenticeship programmes have different training costs and are put into bands which can range from a few thousand pounds to over £25,000. However 16-18 year old’s apprenticeship training is free.

10. Where do I go if I need more information?

The Brooklands College apprenticeship team are available to talk to you about any queries you may have and will come and visit you to talk about your specific circumstances – ring us for a chat or to arrange a meeting on 01932 797 700 or email .(JavaScript must be enabled to view this email address)