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The Apprenticeship Levy: What you need to know

Wednesday, 15 February 2017 14:13

Image: Kate Smith.The new Apprenticeship Levy is set to change the way that private and public companies use apprentices when it comes into play on April 6, 2017.

We know there is a lot of information on the subject of the levy, and you may not wish to read it all, so we’ve compiled a summary of everything you need to know.

What is it?

The Apprenticeship Levy will fund an increase in the number and quality of apprenticeships, almost doubling investment in apprenticeships by 2020 to £2.5bn. The levy will be paid by all private and public sector employers in the UK with an annual pay bill of more than £3 million.

Who is it for?

Employers who pay the levy will be able to access a new digital apprenticeship service that allows them to spend available funds on apprenticeship training. A vast number of employers will not be eligible to pay the levy and these employers will continue to receive government support to pay for apprenticeship training.

How will this affect me?

The levy will be charged at a rate of 0.5% of your annual pay bill, although employers will have a levy allowance of £15,000 per year to offset against the levy payable. The government has committed to an extra 2.5 million apprenticeships in England by 2020, meaning more people with developed vocational skills to work for your organisation. Separate arrangements apply in Scotland, Wales and Northern Ireland.

Can I still use the same training providers?

In tandem with the new levy, the Skills Funding Agency is creating a Register of Apprenticeship Training Providers (RoATP) in support. Through the scheme, training providers must apply to join the RoATP if they want to deliver apprenticeships.

What do I need to do?

It’s crucial that organisations understand how the levy will impact them and begin preparations to access their available funding to ensure they don’t miss out. For many employers, this will mean a complete review and reassessment of their apprenticeship strategy.

If you’re considering the benefits and opportunities associated with apprenticeships, don’t hesitate to get in touch or visit our Apprenticeship Services webpage for more information on how we can help you.