Kaplan's Head of Accountancy Apprenticeships, Cassandra Macdonald, answers all the questions you may have about the new Apprenticeships levy.
When is the levy coming in?
The levy will be introduced from April 2017.
Who will pay the levy?
The levy will apply to employers across all sectors with a payroll bill in excess of £3m a year.
How much will the levy be?
It will be set at a rate of 0.5% of the total payroll and will be collected via PAYE.
What happens to firms who do not need to pay the levy?
The government will continue to provide funding for Apprenticeship training.
How much funding will Apprenticeships receive?
All approved Apprenticeship standards will be allocated a funding cap which will indicate how much levy funding can be used for each Apprenticeship.
How can employers spend it?
Levy funds will be held in ‘digital accounts’. Employers will be able to direct the funds held in these accounts to ‘approved training providers’ to pay for their Apprenticeship training and will have ‘reasonable amount of time’ in which to spend it.
Can I use the levy to fund existing employees?
The detail indicates that yes you can although the government is committed to finding new Apprenticeship vacancies. The consultation response does hint that funding may be different for ‘different types of workers’.
What happens if employers don’t spend your levy funds?
If employers do not spend their levy funds, these will be lost and in the government’s words “will be made more widely available” to other firms engaged with Apprenticeships.
How will this affect Trailblazers?
This will not affect Trailblazer Apprenticeship standards. The work on these standards will continue and as new standards are ready for delivery they will be eligible for funding through the levy.
How will it work in practice?
Limited details have been released. The government have said that they will continue to engage with employers to decide on the best approach before deciding how to proceed.
What should employers do now?
For employers who are already engaged with Apprenticeships, there is little you need to do now other than start to budget for the levy coming in.
If you are an employer who doesn’t currently take on Apprentices and you will be affected by the levy, we would strongly advise that you start to consider setting up a pilot Apprenticeship scheme starting in 2016 so you are in the best position to make use of your levy funds from 2017.
Download our factsheet about the apprenticeships levy.
Kaplan is an expert in Accountancy and Financial Services Apprenticeships and has been heavily involved with the creation of the new Trailblazer standards in our respective sectors.
For further information on the levy or on setting up an Apprenticeship programme please contact Cassandra Macdonald, Head of Accountancy Apprenticeships, on email@example.com.
Want more information?
Register to download your free copy of our popular and thought provoking webinar on the latest Apprenticeship Levy developments. Recorded on 21st June 2016.