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Apprenticeship Levy April 2017

Is your company aware of the launch of the Apprenticeship Levy on April 6th 2017?

If you have apprentices or employees studying for other qualifications how your company funds the training is changing this year.  Read on to find out about the apprenticeship levy and what it will mean for your business.

What is the Apprenticeship Levy?

On 6th April 2017 the way the government funds apprenticeships in England changes. Some employers will be required to contribute to a new apprenticeship levy. There will also be changes to the way funding for apprenticeships and training is organised. These changes will be for all employers, no matter what their company size. Companies will not be able to opt out of this scheme.

Will your company need to pay the Apprenticeship Levy?

  • Your company will be required to pay the apprenticeship levy if you are an employer, in any sector, with a salary bill of more than £3 million each year.
  • If your company salary bill is less than £3 million each year you will either, not pay the apprenticeship levy or will have to contribute a small amount towards training costs.

If your business has a salary bill of more than £3 million per year:

  • The levy will be charged at a rate of 0.5% of your companies annual salary bill.
  • The payment of the levy will be made to HM Revenue and Customs through the PAYE process.
  • Your company will receive a levy allowance of £15,000 each year to offset against the levy you must pay.
  • This will give your company £15,000 per year to spend on Apprenticeships and employee training.

If your business has a salary bill of less than £3 million per year:

  • Your business will not be required to pay the Apprenticeship Levy or only make a 10% contribution towards the cost of the training.  The Government will pay the other 90% of the training costs.
  • Your company will still receive a levy allowance of £15,000 per year to spend on apprenticeships and employee training.
  • If your company is not required to pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018. (Updated)

What other changes are happening?

Changes in what apprentices study in order to complete their training.

Currently apprenticeships involve undertaking a series of work-related vocational and professional qualifications, with workplace and classroom based training. This is known as an Apprenticeship Framework.

From Spring 2017 all new apprenticeships will follow this framework or a new style apprenticeship called Apprenticeship Standards.

Apprenticeship standards are a new type of apprenticeship developed by employer groups known as ‘trailblazers’.

Each specific job role has had a set of core skills, knowledge and behaviours outlined which an apprentice will need to be able to show they are fully competent in before they successfully complete their training. This will mean they meet, more closely, the needs of the job role and of the employers in the specific sector they are working in.

By 2020, the Apprentice Framework system will be phased out and all apprenticeships will follow the Apprenticeship Standards.

All employers will choose their own training provider and assessment organisation.

All business will have the opportunity to decide which training provider they wish to use to train their apprentices. You will only be able to spend your apprenticeship levy allowance with an approved training provider.

All employers will have access to a register providing details of approved training providers and assessment organisations. This will enable your business to find the best training companies to service your training needs within your sector.

More information:

You can read more about the Apprenticeship Levy on the Government website.

Speak to our Training Department to discuss the apprenticeship levy, apprenticeships and other training needs you have for your current employees.

Contact Gary Robson on 0191 2445416 or send a message by clicking the button below and one of our training team will get back to you.

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