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Apprenticeship Levy

The Apprenticeship Levy has landed

What is the apprenticeship levy?
The government has introduced the apprenticeship levy to help fund three million new apprenticeships by 2020. The levy has been applied to all industries in the UK and applies to the largest UK employers at a rate of 0.5 per cent of their wage bill and will be collected through PAYE

Who pays the apprenticeship levy?
Employers in the UK that have an annual wage bill of £3 million and over will now need to pay the levy. This includes public sector, charities and educational providers such as academies and universities. It is estimated that 2% of all employers currently engaged in government funded apprenticeships will now be required to contribute via PAYE. This same 2% will also receive a 10% top up each month from the government based on their monthly contribution.

What happens to employers who do not need to pay the levy?
Non-levy paying employers are now required to make a 10% contribution (direct to the provider of choice and not via PAYE) for the training that each of their apprentices receives. The government will provide the 90% balance.

What is AS (Apprenticeship Service)?
This new on-line portal is now accessible for all levy payers. AS lists all of the employer’s funds available to spend on apprenticeship training. The employer will select their provider of choice through AS from a list of approved apprenticeship providers.

If you are a levy paying employer and are yet to register, follow the link below to get started: https://www.gov.uk/guidance/manage-apprenticeship-funds

Access for non-paying levy employers will roll out from 2018.

Latest official government updates can be found here: https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

Still unsure if your organisation will be liable for the new apprenticeship levy tax? If you are, do you know how much you will have to contribute via PAYE? Use this simple on-line tool to get your answers! (You’ll need to know your organisation’s annual UK payroll) https://estimate-my-apprenticeship-funding.sfa.bis.gov.uk/

We have a dedicated ‘reforms’ inbox for our customers. Email reforms@smarttar.co.uk with any queries you have regarding these new changes. A response will be with you within 1 working day.

The new apprenticeship reforms have brought with them some exciting employer incentives, take a look below

Teen Grant
£1000 incentive for every new 16-18 apprenticeship start from 1st May 2017

This is payable at the end of Month 3 and Month 12 of each learner’s qualification.

This incentive also applies to any learner aged 19+ coming from a care background.

Entrepreneur Offer
For small businesses employing less than 50 employees, 16-18 apprentices remain contribution free. This incentive also applies to any learner aged 19+ coming from a care background.

In light of these new incentives being introduced the AGE grant will cease to exist from 31st July 2017