What is the Apprenticeship Levy?
The Apprenticeship Levy was announced in the 2015 Summer Budget, and is being introduced to fund the 3 million new apprenticeships pledged by 2020.
When will the Apprenticeship Levy be introduced?
The levy will take effect from 6th April 2017, in order to fund new apprenticeships from 1st May 2017.
Who will have to pay the Apprenticeship Levy?
Employers with a total wage bill in excess of £3m will be required to pay the levy.
How is the Apprenticeship Levy calculated, and how do I pay it?
The levy is paid through PAYE every month, and will be a 0.5% tax of the company’s total wage bill, after an allowance of £15,000.
Connected companies or charities will only have one £15,000 allowance to share between them.
HMRC provide guidance on how to pay the apprenticeship levy.
How can I view my Apprenticeship Service account?
The funds you contribute to the Apprenticeship Levy will be deposited in an online account called the Apprenticeship Service. You can use the online Apprenticeship Service to:
- select an apprenticeship framework or standard;
- choose the training provider or providers you want to deliver the training;
- choose the organisation that will assess your apprentices;
- post apprenticeship vacancies;
- set the price you’ve agreed with your training provider;
- pay for apprenticeship training and assessment;
- tell the Government to stop or pause payments.
Do the Government contribute anything to my Apprenticeship Service account?
The Government will contribute a 10% top-up to the funds that are deposited in your levy account. The top-up funds will be deposited at the same time the levy payments enter your apprenticeship service account each month.
My company doesn’t meet the £3m pay bill threshold. What does the Apprenticeship Levy mean for me?
As a firm with a pay bill below £3m, and therefore not contributing to the levy, the Government will contribute 90% of the training costs of your apprentices; you will be required to fund the remaining 10%. This also applies to levy payers whose levy funds have run out.
Will the Apprenticeship Levy affect our current apprentices?
The levy will not affect the way that you fund training for your apprentices who started their programme before 1st May 2017. You will need to carry on funding these apprentices under the terms and conditions that were in place at the time in which the apprenticeship started.