Apprenticeship Levy

Apprenticeship Levy

As of 6th April 2017, all businesses with an annual payroll of over £3 million will be subject to the apprenticeship levy.  The levy is calculated as 0.5% of the employer’s pay bill and is determined automatically by the Real Time Information submitted to HMRC.

The introduction of the levy is part of the Government’s plan to increase the quality and quantity of apprenticeships available.

All of the levy paid (plus a 10% government top up applied to businesses in England) will go into a digital account, known as the ‘Digital Apprenticeship Service’ (DAS). Employers will be able to access their funds from May 2017, and will have up to 24 months to use them before they expire.

The levy can be used to fund accredited apprenticeship training and assessment, provided by Government approved training providers only. Businesses can recruit new apprentices or they can spend it on training existing employees. The levy cannot be used to pay for apprentices’ wages or expenses etc.

Apprenticeships usually last for a minimum of one year, based on working a minimum of 30 hours per week – which must include 20% ‘off the job’ training. Apprentices must be paid at least the relevant minimum wage (currently £3.50 per hour for those under 19, or over 19 but in their first year of their apprenticeship) and are entitled to normal pay and conditions as any other employee – including holiday pay.

Via the DAS, employers will be able to view the different types of apprenticeships available, the amount of funding they can draw down for each apprenticeship and find a training provider.

These changes do not affect any apprenticeship training which commenced or commences before 1st May 2017. Businesses with staff in Scotland, Wales and Northern Ireland are still liable to pay the levy, but there are different rules for how it can be used.

Contact AP Training on 01636 611320 to find out how we can train your existing staff or help you find the right new apprentice to grow your business.


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