What is the Apprenticeship Levy
The Apprenticeship Levy explained
The Apprenticeship Levy is a new apprenticeship funding system that took effect from April 2017. It’s designed to create a new fund that will pay for the training of three million apprentices in the UK by 2020. It affects all UK organisations with a PAYE wage bill of £3m or more. If that applies to you or your organisation, a fee equal to 0.5% of your payroll will be collected by HMRC through your PAYE systems.
The good news is that we can help you turn the Levy to your advantage and with careful planning you can recover 100% of the Levy you have paid. All of the apprenticeships that we offer are fully ‘levy compliant’. When we deliver apprenticeship training for you and your employees you will be able to recover an agreed amount of the Levy you have paid to HMRC to fund that training. Apprenticeship Levy recovery values range from £3,000 to £27,000 per apprenticeship.
But that’s not all – you are not limited in the number of apprentices you can train. Even if you recover 100% of the Levy you have paid you will be able to access additional co-funding. This is a generous grant from central government that will pay for 90% of the cost of any additional apprentices you train. You automatically qualify for this once you have used up your available Levy. If you’re not a Levy payer you can access co-funding from day one.
How does it work?
- HMRC collect 0.5% of your payroll monthly
- Funds collected are credited to your online ‘levy account’ called the Apprenticeship Service Account (ASA)
- Your credits are topped up by an additional 10% from the government
- You recruit apprentices and/or ask your existing employees to undertake apprenticeship training
- You appoint a training provider through your ASA. Providers have to be approved and you can only contract those that are listed on the Register of Apprenticeship Training Providers (RoATP)
- Your appointed provider then signs up your apprentices, delivers the training and arranged for the assessment and accreditation of your employees when they have completed their apprenticeship
- How much Apprenticeship Levy will you pay annually
- How much will you be able to spend/recover monthly
- Which staff do you want to train and what new skills do you want them to acquire
- How do these correlate to the availability of apprenticeship standards (given only formally recognised apprenticeships count)
- Who can deliver these apprenticeships for you and how long do they take to complete?
If you’re an employer new to the world of apprenticeships, sorting out the basics may not be that simple. We offer a free advisory service to help you scope out your approach and get your heads around how all this works – alternatively you can read through our FAQs.
We’ll work with you to develop a full-blown Apprenticeship Levy Recovery Blueprint so that you can develop a detailed month-by-month action plan.
Apprenticeships and Apprenticeship Training Providers have changed, with the former re-designed by employers’ groups to better reflect the needs of employers.
At the Apprenticeship College we work with you to design fully compliant apprenticeship programmes that meet your skills needs, are funded through the Apprenticeship Levy (and/or co-funding) and delivered through an innovative and engaging training model.