The apprenticeship levy is here. As of early April, UK employers with a PAYE bill over £3 million must pay 0.5% of their annual payroll into the levy which can be used to pay for apprenticeships. London South Bank University put together this very quick overview for you to cover the basics. If you still have questions or you'd like free help and advice on how to maximise your levy spend then get in touch with their dedicated apprenticeships team.
How is the levy paid?
- Levy payers must declare that they qualify to pay the levy to the HMRC
- Payments will be collected monthly from 6th April through PAYE.
- The Government will give a 10% top up so that every £1 will be increased to £1.10
- Contributions will be offset by a £15,000 tax free allowance
- Any unspent levy funds will expire 24 months after they enter the digital account
- From 2018, up to 10% of the levy funds can be transferred each year to another employer with a digital account or an Apprenticeship Training Agency (ATA)
What can the levy be spent on?
Levy funds can be spent on apprenticeship training and assessment that meets an approved standard delivered by an approved training provider.
The Government will set a funding cap for each apprenticeship standard and the levy can only be spent up to the cap.
Any costs over and above the cap must be met by the employer. The levy does not cover any salary or additional payments or benefits.
What training costs will the levy cover?
- Levy payers will have 100% of training costs paid via levy up to the funding cap
- All employers that employ an apprentice aged 16-18 will receive a £1000 incentive
What about non-levy payers?
- Non-levy payers can still access the levy funds to part fund apprenticeship training
- Non-levy payers will have 90% paid via levy and the employer pays 10%
- Employers with less than 50 staff sending an apprentice aged 16-18 will have 100% of the training costs paid via the levy