Category: Degree apprenticeships
11 October 2017
The Government has introduced the Apprenticeship Levy in a bid to bridge the skills gap by raising the number and quality of apprentices in the UK. Here are three key questions you need answered about the levy.
The levy came into effect on 6 April 2011, and will fund the Government’s plan to achieve three million apprenticeships by 2020.
To help you understand more about how the Apprenticeship Levy works, take a look at the answers to these three most frequently asked questions.
If your business has an annual wage bill of over £3 million you will pay the Apprenticeship Levy.
You’ll pay into a Digital Apprenticeship Service account, which costs 0.5% of your monthly payroll. You will have an allowance of £15,000 to offset against the amount you pay.
You can use the governments HMRC’s basic PAYE tool to help you calculate how much you need to pay. Keep reading to find out more about our non-levy payers on question three.
Funds will be accessed through a new Digital Apprenticeship Service account.
Employers will need to register to create an account, and link it to their PAYE schemes. You’ll see funds appear in your digital account monthly.
The levy will be collected monthly and will then be deposited in the employer’s Digital Apprenticeship Service account with a 10% bonus top-up. If you’re based in England, you’ll be eligible to receive 90% of the cost of apprenticeship training.
The digital funds can then be used to pay apprenticeship providers to train your apprentices. Funds can only be used for apprenticeships and unused funds will be lost after they’ve been in your account for 24 months.
If your annual payroll is less than £3 million, you will not need to pay the apprenticeship levy.
But if you operate in England, you’ll receive Government funding for apprenticeship training. In this case the 10% share of your programme costs will be invoiced directly to you by your training provider once your apprentice has started their programme.