The Apprenticeship Levy and the Implications for SME Employers
SME Employers with wage bills of less than £3million will also be affected by the reforms being brought in, including a requirement that in some cases employers will be required to contribute to the cost of training and assessment
By 2020, all employers will be able to use the digital apprenticeship service to pay for training and assessment for apprenticeships. Until then, non-levy paying SME employers will continue to negotiate and agree their apprenticeship programme with their chosen training provider.
• SME employers will have to make a cash contribution towards the cost of training and assessing an Apprentice. The Government will pay 90% of the cost with the employer paying 10%.
• However, if the employer has less than 50 staff and they recruit a 16 to 18 year old Apprentice, the Government will pay 100% of the cost of the training and assessment.
• The Government are simplifying Apprenticeship funding by placing every Apprenticeship into one of 15 funding bands, ranging from £1,500 to £27,000.
• This means that employer contributions could be as little as £150 and can go to a maximum of £2,700, depending on the type and level of the Apprenticeship training.
• All employers, regardless of size will receive an additional support payment of £1,000 for employing an apprentice who is aged between 16 and 18, even where the Government has funded 100% of the training and assessment costs.
• The training provider that the employer works with to deliver the Apprenticeship will also receive an incentive payment of £1,000 from the Government for delivering Apprenticeship training for a 16 to 18 year old.
• 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.