New Apprenticeship Levy and Funding Changes Set for 2017
In order to increase the number and quality of apprenticeships in the United Kingdom, the government recently introduced a new apprenticeship levy and Digital Apprenticeship Service that will benefit all businesses interested in apprentices. However, only employers with a pay bill of more than £3 million each year will be required to pay the levy.
The levy will be set at 0.5 per cent of an employer’s pay bill, and employers will pay the levy to HM Revenue and Customs, through the Pay as You Earn process alongside tax and National Insurance Contributions. Employers will receive an annual allowance of £15,000 to offset the levy amount they must pay.
Employers who pay the levy will be able to access funding and pay for apprenticeship training and assessment through the new Digital Apprenticeship Service (DAS), which the government hopes to make available in January 2017. Non-paying employers will not be able to use the service until at least 2018, but will instead receive funding through ‘co-investment’, in which employers pay training providers directly, and the government helps cover the cost. However, both paying and non-paying employers will be able to use the service to post apprenticeship vacancies, choose training providers, and select apprenticeship framework or standards.
To further assist paying employers, the government will apply a 10 per cent top-up to monthly funds for apprenticeship training in England. Both funds, via the DAS and co-investment, can only be used to pay for apprenticeship training and assessment, not for things like wages.
While the levy will not come into force until April 2017, your business can still be proactive in taking on apprentices. One way that you can do this is by applying for the Apprenticeship Grant for Employers, which provides employers with fewer than 50 employees with £1,500 for each of their first five apprentices aged 16 to 24.
The government will release more information about the apprenticeship levy later this year. For further guidance on how to take on apprentices and other related resources, visit www.gov.uk/take-on-an-apprentice.