Tag Apprenticeship Levy


Six Ways Employers Can Use the Apprenticeship Levy to Their Advantage

Don’t let the word “levy” put you off apprenticeships. You can use them to benefit your business. That just 13 per cent of the Government’s apprenticeship budget was spent last year means that thousands of employers are missing out.


You might need new skills to grow your service offering or you might be worried about who’s going to replace your current managers as they retire. Apprenticeships can provide the solutions to these challenges.


Here are five ways employers can use the Apprenticeship Levy to their advantage:


  1. Use the Government’s co-investment rate if you’re not a levy-paying business. Here the Government will pay 95 per cent of the training and assessment costs.


  1. If you employ a 16 to 18-year-old, you will receive a £1,000 grant, and for businesses that employ fewer than 50 staff that take on a 16 to 18-year-old apprentice, the Government will fund 100 per cent of the training costs.


  1. Apprenticeship rules state that 20 per cent of an apprentice’s time should be spent on “off-the-job” training. Don’t let this put you off. This time doesn’t have to be spent off-site in a classroom. In fact it can cover a range of activities such as practical training, theory-based learning and special assignments.


  1. Consider the skills line managers and leaders may need to manage apprentices effectively. Skills such as coaching and mentoring are fundamental to making a successful apprenticeship, but other skills such as developing confidence and resilience in apprentices are important and will mean the difference between your apprentices adding substantial value to your business or being a burden on resources.


  1. You can use apprentices to spot and develop future leaders for your business. This also applies to existing staff, as remember the Apprenticeship Levy funds can be used for training people of all ages. For career starters you can expose them to different functions of your business to give them the broad understanding that leaders need, and for existing staff you can leadership qualifications.


  1. Use apprenticeships as a tool for workforce planning. You’ll need to consider what skills your apprentices will need as they progress – so setting milestones and timelines is important for levy payers.


To find out more about what the Apprenticeship Levy means for your businesses and how to take advantage of it, contact NCG’s specialist team on 0191 200 4800 and info@ncgrp.co.uk.

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The Apprenticeship Levy Explained: What your business needs to know

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.


For more information about the levy, email apprenticeships@ncl-coll.ac.uk or visit gov.uk: Apprenticeship funding: how it will work.


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