The Ascento Blog

What will the Apprenticeship Levy allow you to do?

[fa icon="calendar"] Jun 7, 2019 1:00:00 PM / by Oliver Simpson   

Oliver Simpson

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Welcome to the ninth article in our 18 part series on the Apprenticeship Levy. In this series, we’re exploring everything there is to know about the levy in order to help businesses make the most of it. So far, we’ve examined what the levy is and how the funds are raised, and even gone into detail about how to set up a digital account and start using whatever funds you’re entitled to. In this article we’ll be focusing on one very simple idea - what does the levy allow your business to do?

The levy came into effect back in April 2017 and, two years on, it’s gone from strength to strength. In a nutshell, it’s a government policy which requires employers with a wage bill of more than £3 million to contribute 0.5% of their annual payroll into the levy fund. For their contribution, large employers will receive a £15,000 allowance in their DAS (Digital Apprenticeship Services) portal as well as any further funds they invest. These funds stay in place for two years before they expire and are passed out into the wider pool for other businesses to use. Smaller firms can get in on the action right away if they’re willing to contribute 10% of any apprenticeship costs, with the levy picking up the remaining 90%.

Either way, these funds will be spent on apprenticeship programmes to help transform and upskill the workforce. The fund is there, so how can you use it?


Expand your team and hire an apprentice

The system is designed to make hiring new apprentices an attractive proposition. In fact, if your business has fewer than 50 employees, it won’t cost you a penny to employ an apprentice under the age of 19. What’s more, you’ll receive a £1,000 bursary payment as an added incentive. That’s a great way to get fresh, upcoming talent into your workforce.


Train your existing employees instead

The word ‘apprentice’ still summons images of a young school leaver keen to get into the world of work so they can be paid while they learn. Nowadays, apprenticeships are open to absolutely anybody. That means if you’ve got an existing team member looking for a promotion and you’re willing to invest in them to help them skill up, you can enrol them on an apprenticeship course using levy funds.


Start your own learning and development plans

This is perhaps one for the bigger businesses, but still well worth mentioning. If you want to get serious about making apprenticeships a core part of your business practice (and why wouldn’t you), there are options to use the levy fund to that end. So long as your learning and development initiatives hit certain criteria and your candidates can pass official assessments set by recognised and registered bodies, you’re good to go. That way, you can use the fund to invest directly into your business, perhaps even setting up a new L&D department.


Pass it on

Here’s the thing. Levy contributions aren’t optional. Firms of a certain size are required by legislation to contribute a percentage of their payroll via PAYE. That’s led some employers who aren’t interested in apprenticeships to see it as some kind of ‘tax’, but that’s just because they’re not seeing the benefits. If you’ve looked into the benefits and are still sure you can’t use the funds that have been allocated to you, don’t despair. You can pass up to 50% of your funds onto other businesses in your area, helping you to build relationships in your community.

In our next piece we’ll be looking at what courses are available through the apprenticeship levy and how your business can take advantage.

 

About Ascento

Ascento learning and development specialise in providing workforce development apprenticeship programmes to both apprenticeship levy paying employers and non levy employers. We work closely with employers to identify the key areas for development and design  strategic solutions to tackle these with programmes that are tailored to each individual learner. With two schools of excellence focusing on Management and Digital Marketing we don’t deliver every qualification under the sun, but focus on what we know best and ensure that quality is at the heart of everything we do.

Topics: Apprenticeship Levy

Oliver Simpson

Written by Oliver Simpson