The Apprenticeship Levy was introduced by the government to create long term sustainable funding for apprenticeships and to give employers more control over training and development of their workforce.
By 2019-20 the funding available for investment in apprenticeships in England will have risen to over £2.5 billion.
How does it work?
The levy applies to UK employers in both the private and public sector with an expected pay bill of more than £3 million. The levy is charged at 0.5% of the employers' entire annual pay bill. However employers have a levy allowance to offset against this. The levy allowance is worth £15,000. This means that the amount that employers will have to pay is 0.5% of their pay bill minus £15,000.
For example - an employer expects to pay £40,000 based upon 0.5% of their pay bill. Taking the £15,000 allowance into consideration £40,000 minus £15,000 means that they will only need to pay £25,000.
The levy will be collected by HMRC by monthly payments through PAYE and will be paid into a Digital Account for the employer to spend on training and assessment for apprenticeships.
Use it or Lose it!
Any funds that remain unused are channelled back to a central pot used to fund apprenticeships provided by other employers including your direct competitors. in effect if you don't use your levy money your are funding your competitors!
What can I do about it?
At Oxford Applied Training, we have developed tremendous expertise in advising levy employers on the best and most efficient way to spend their apprenticeship levy to benefit their business.
Why not find out more and book a free no-obligation consultation with one of our expert consultants.
You can also find out more here about the apprenticeship programmes we offer, our Digital First approach and our quality standards and commitment to apprentices and employers.