The Apprenticeship Levy – what on earth is it?
This spring the Government introduces the Apprenticeship Levy. From 6th April 2017 there will be significant changes to how apprenticeship training is funded for all employers and some employers will be expected to pay an Apprenticeship Levy.
TIP: The Apprenticeship Levy does not affect apprenticeships that start prior to 1st May 2017.
Who will be liable to pay the Apprenticeship Levy?
The new apprenticeships funding changes applies to all employers in England. All employers in England (Wales, Scotland and Ireland have their own governing body, check with your local Government for information in these countries) who have a wage bill in excess of £3million per annum will be expected to “invest” in the Apprenticeship Levy. Those applicable will report and pay the Levy through their PAYE system.
What does the Apprenticeship Levy mean for SME’s?
For Employers that do not pay into the Levy, the Government Portal states:
“We will ask you to make a 10% contribution to the cost of apprenticeship training and government will pay the rest (90%), up to the maximum amount of government funding available for that apprenticeship. As both you and the government make a payment, we call this ‘co-investment’.”
With this new “Vision” the Government seem to be less focused on incentivising employers to take apprentices. Previously the training was fully funded and employers were able to claim a government grant towards the cost of upskilling a less experienced or qualified person. It will be interesting to see how these changes will impact upon smaller businesses who now may be less inclined or less able to take the chance on an apprentice. A real shame as I have seen some apprentices go on to be highly valued members of the team. I have also seen a few apprentices not appreciate or make the most of the opportunity presented to them. It’s this risk with the “investment” addition and loss of the grant that may deter the smaller employers from continuing to invest in apprentices.
Help and advice
If you need help and advice with any aspect of your recruitment, retention and development “Get it Solved” contact solved hr on 07700 900024 or email [email protected]