Skip to main content
search
Employee BenefitsLegislation

What will the Apprenticeship Levy mean for your business?

By March 21, 2017 October 22nd, 2020 No Comments
Employee BenefitsLegislation

What will the Apprenticeship Levy mean for your business?

By March 21, 2017 October 22nd, 2020 No Comments

he new apprenticeship levy set to come into effect from April this year will affect all companies with an annual payroll of over £3 million. Companies with payrolls of this level will have to pay 0.5% of any money over that threshold towards an apprenticeship fund. The amount owed by companies will need to be reported to HMRC each month through the Employer Payment Summary, when the amount due will be automatically deducted from the company and placed into the Apprenticeship Levy fund.

The levy’s aim is to boost the government’s efforts to achieve its target of 3 million apprentices across the UK by 2020. A recent survey of 500 senior business leaders suggests that the scheme is already having a positive impact, with 59% saying they planned to recruit apprentices in 2017, compared to 44% who intended to recruit university graduates.

Money accrued from the levy will be available for use to fund apprenticeships from official training providers. The government will also be providing some additional help, with funds from compulsory levy payers being topped up by a further 10%. The benefits aren’t just limited to compulsory payers however, as businesses with wage bills under £3 million can still take advantage of the scheme. They can pay for training through the same online service with the government covering 90% of the training costs, leaving the business to only pay the remaining 10%.

The benefits of the apprenticeship scheme for both employers and individuals are numerous. For businesses, they offer an opportunity to recruit from a wider and more inclusive field, bringing different skills and greater diversity into the company. For those looking for employment, apprenticeships are a genuine alternative route into higher education based around an ‘earn while you learn’ model, allowing them to gain both recognised qualifications and practical experience.

Apprenticeships aren’t just for recent school leavers either. Many older individuals who’ve found themselves unemployed and struggling to rejoin the workforce have benefitted from the scheme. Becoming an apprentice allows them to demonstrate and hone their existing skills as well as developing new ones, whilst also formalising their previous experience in a way that makes them highly employable once more. Taking on an apprentice is a great way of supporting individuals in circumstances such as these, as well as providing benefits for your business which you might not find elsewhere.

Sources

https://www.telegraph.co.uk/education/2017/02/13/one-three-businesses-unaware-new-apprenticeship-levy-survey/
https://www.morningadvertiser.co.uk/Running-your-pub/Training/Apprenticeship-levy-April-2017-7-things-you-need-to-know