What is the Apprenticeship Levy

The Apprenticeship Levy came into effect in April 2017, and totally transformed the way that apprenticeships in England are funded. The apprenticeship levy requires all employers operating in the UK with a pay bill of over £3 million each year to make an investment towards apprenticeships. If you are an employer, in any sector with a pay bill of more than £3 million each year you will be charged a levy at a rate of 0.5% of your annual pay bill. You will pay the apprenticeship levy through the PAYE process and will be able to use the funds you contribute for apprenticeships within your organisation or supply chain.

How will the apprenticeship levy affect us?

Paybill of £3 million or more

If you are an Employers with an annual paybill of more than £3 million, you will start to pay the levy in May 2017. Once you have declared the levy to HMRC, you will make monthly payments through the PAYE system, the government will top this up with a 10% contribution. You will be able to access funding for apprenticeships through a new digital apprenticeship service account.

Paybill of less than £3 million

If your annual paybill is less than £3 million you do not pay the levy and you won't need to use the digital apprenticeship service to pay for apprenticeships training and assessment until at least 2018. The way apprenticeships are funded will however change for you, and from April 2017 you will be required to make a contribution to the cost of apprenticeships. Organisations with a paybill of less than £3 million pounds will be required to contribute 10% of the cost of the programme with the government paying the remaining 90%, up to the maximum amount of government funding available for the specific apprenticeship.

The Digital Apprenticeship Service

All levy paying employers will need to register for the digital apprenticeship service when this becomes available. The Digital Apprenticeship Service will be the place for employers to go in order to manage their levy pot, accounts will be credited each month with the apprenticeship levy contribution plus the 10% government top up. You will also be able to use the service to find out what apprenticeship provision is available and the providers with whom it is available. The levy funds held in your account will expire 24 months after they have been deposited.

By subscribing to our email alerts you will be kept up to date on all the latest levy news and developments including the launch of the Digital Apprenticeship Service.

How to spend the apprenticeship Levy effectively

"Don't just see the Levy as an expense, see it as an investment in your organisation and its people"

First and foremost your priorities as a business should determine how you spend your apprenticeship levy, remember this is your money and this puts you in the driving seat. It is also worth remembering that the Apprenticeship Levy is not just focused on recruiting and training new employees into your business. The levy can also be used to develop and upskill existing staff with high quality programmes that can be tailored to meet your requirements as a business.

The new apprenticeship standards and the funding give greater flexibility in terms of what can be delivered and who is eligible. For example existing graduate programmes can be funded using the degree level apprenticeships and internal management programmes can be funded using a variety of different level management apprenticeships.

How to plan for the Apprenticeship Levy

Identify who within your organisation is going to co-ordinate or mange the Apprenticeship Levy
Start to identify your training and apprenticeship requirements. Do not just include training that has historically been fundable.
Think about succession planning and how you can develop the skills you will need in the future
Develop a plan to inform staff of the opportunities that may be available to them, and how they can register their interest
Subscribe to the Ascento updates to be made aware of the latest levy news

Apprenticeship Levy Support

At Ascento we will provide levy paying employers with support free of charge. Our range of services include:

Support to develop an apprenticeship strategy
Organisational training needs analysis
Regular apprenticeship levy updates via our blogs and email alerts
One to One consultancy support
Apprenticeship Levy financial profiling
Planning and managing apprenticeship programmes delivered via your Apprenticeship Levy spend
Mapping of current training against the apprenticeship standards
Support in becoming an employer provider

The Apprenticeship Levy