From April 2017 the government introduced an apprenticeship levy for all employers with a payroll in excess of £3 million. The Apprenticeship levy was part of a wider reform of the apprenticeship system which has affected employers of all sizes who plan to take on apprentices after May 2017. PTS Training Academy is able to support employers to understand these changes and support you to continue to enjoy the benefits that apprentices can bring to your business.
Any UK employer, in any sector, with a pay bill of more than £3 million per year is liable to pay the levy which has been set at a rate of 0.5% of the payroll in excess of £3 million pounds. For example if your business has a payroll of £5 million they would pay a levy amount of £10,000 which is 0.5% of the £2 million payroll which is above the £3 million threshold. You will calculate, report and pay your levy to HMRC, through the Pay as You Earn (PAYE) process alongside income tax and National Insurance. The levy will be paid into a digital apprenticeship account and the government will top up this account by an additional 10% meaning that employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay in.
You can use this tool to estimate if your organisation will pay the apprenticeship levy and how much funding you will receive.
How can levy funds be used
Digital funds and government funding can only be used for apprenticeship training and assessment against an approved framework or standard with an approved training provider and assessment organisation up to the funding band maximum for that apprenticeship. The funds cannot be used for wages, travel and subsidiary costs, managerial costs and the costs of setting up an apprenticeship programme. Digital funds will enter the account monthly and will expire 24 months after entering the account unless they are invested in apprenticeship training. Funds will leave the account in the order they are paid and it will take careful planning to ensure that the levy funds are maximised.
Should any employer want to employ more apprenticeships than are covered with their levy payments they are free to do so but each additional apprenticeship will follow the co-funding model where employers need to contribute 10% of the cost of apprenticeship training with the government funding the remaining 90% of the training and assessment cost. The government will also fully fund any additional learning support and English and maths training required to support apprenticeship achievement.
The Apprenticeship Service
The Apprenticeship Service on GOV.UK allows employers to plan and manage their apprenticeship programmes. In order to access and manage your levy funds you will need to register for your digital account on the apprenticeship service and use this to allocate funds to apprenticeship training. You will be able to use your account to
Estimate apprenticeship funding
View your levy account balance
Manage your apprentices
Approve funds to pay for apprenticeship training.
PTS Training Academy has over 20 years’ experience of supporting employers to create high quality training solutions to support business growth. We can support you at every stage of the journey to take advantage of the opportunity that the apprenticeship levy brings to grow your business and support relevant skills development for new and existing staff.