Following a government consultation the Apprenticeship Levy will come into force on 6th April 2017. The information below should help you prepare for how this will affect your organisation.
Are you a levy payer?
If your organisation has a paybill of £3 million or more you will be a levy payer from 1st May 2017. 0.5% of your pay bill will, via HMRC, be paid into a levy pot which you can then spend on apprenticeship training in your organisation. Please note: There is a £15,000 allowance before the levy is applied.
Via the Digital Apprenticeship Service you will be able to view your levy funds and search for and select your preferred supplier.
If your salary bill is less than £3 million, you will be a non-levy paying employer.
From 1st May 2017 you will be expected to contribute 10% of the maximum funding band for your chosen qualification in cash terms. Please note this is mandatory except for the exemption categories as detailed below. The remaining 90% will be contributed by Skills Funding Agency and will be paid directly to your chosen provider pending an agreement being agreed by both parties (employer and provider).
Please note – the 10% payment has to be made up front before the remaining 90% funding is released to your provider and this has to be evidenced to Skills Funding Agency.
Like levy paying companies, non- levy payers will also be able to use the Digital Apprenticeship Service to search for approved providers in your area, select your provider of choice and agree both financial and delivery terms.
There is no cash contribution required for learners 16-18yrs. This age group will continue to be fully funded by Skills Funding Agency and an incentive payment of £1000 is payable to both the provider and the employer (£1000 payment each).
The SFA will also contribute 100% funding for 19-24yr old care leavers or 19-24yr olds with an education or health care plan.
All changes relate to both new starts and existing staff
Further information for both levy and non- levy paying employers can be found using the following link: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
Chamber Training will be holding a series of free information events in the new year to answer all your questions and help you better understand how the changes will affect your business. Dates will be announced shortly so please look out for them in the near future………
Until 1st May 2017 all current funding systems remain the same so we would advise you to consider your recruitment needs now and avoid the forthcoming changes. Chamber Training will be providing additional support to employers between now and 1st May to ensure you make the right choices before the levy is active. A member of staff would be happy to discuss your options in more detail, or if you would like further information please do not hesitate to contact us on: – 01482 611896.