The Apprenticeship Levy and the Implications for Levy Paying Employers

This new funding system supports the English apprenticeship funding system only and applies to companies with wage bills of over £3million.
Scotland, Wales and Northern Ireland have their own arrangements for supporting Employers to access Apprenticeships, through their devolved Assembly’s.
The Levy forms part of a broader programme of apprenticeship reforms that the Government is introducing. The Government believe that Apprenticeships are good for business and a great way to develop the skills of the workforce both now and in the future. The aim of the Apprenticeship reforms is to deliver more Apprenticeships of a better quality to help improve economic productivity.
• Employers will pay levy contributions to HMRC on a monthly basis alongside usual PAYE payments.
• Levy contributions are placed in an account on the Digital Apprenticeship Service online portal.
• The employer can access the funds in this account to purchase Apprenticeships training and assessment for their staff.
• If the employer decides not to purchase Apprenticeship training, levy contributions will expire 24 months after they are deposited. eg April 2017 contributions will expire in April 2019.
• Contributions can only be used to pay for the training and assessment of Apprentices who work in England. Wales, Scotland and Northern Ireland are subject to different systems.
• The Government will automatically top up an employers levy contributions by 10% in order that employers receive more funding for training than they pay in.
• From April 2017 the Digital Apprenticeship Service will provide employers with information on:
- Available Apprenticeships - The sourcing of approved training providers and colleges - Advertising Apprenticeship vacancies - Paying for Apprenticeship training using levy funds
• The Government are simplifying Apprenticeship funding by placing every Apprenticeship into one of 15 funding bands, ranging from £1,500 to £27,000.
• All employers will receive an additional support payment of £1,000 for employing an apprentice who is aged between 16 and 18. The training provider that the employer works with to deliver the Apprenticeship will also receive an incentive payment of £1,000.
• Support payments of £1,000 will also be available to employers who take on Apprentices aged between 19 and 24 who were formerly in the care of a local authority or who have an Education Plan.

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