Apprenticeship Levy: five key points
7th Mar 2017
The apprenticeship levy will come into effect on 6 April 2017, with the aim of funding three million apprenticeships by 2020, and help to address skills shortages. Here, we clarify what it is and how it will affect you and your business.
1. Employers with a payroll bill of £3 million or over will have to pay towards the levy. The rate will be 0.5% of their annual bill, with employers receiving a £15,000 allowance deducted from their contributions.
2. Each employer will hold a digital account which they can use to pay apprenticeship training providers. The fund cannot be used for other means.
3. Unused funds will expire if they are not used within two years of submission.
4. Employers will choose from list of training providers suitable for their requirements, with these providers receiving cash incentives to promote future courses.
5. In order to encourage collaborative working relationships, levy contributors will be able to transfer up to 10% of funds to the account of another employer, from 2018.
If your organisation qualifies for the apprenticeship levy, guidance can be found at www.gov.uk/topic/further-education-skills/apprenticeships