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Apprenticeship Levy Information for Employers

The government is committed to significantly increasing the quantity and quality of Apprenticeships in England and achieving 3 million starts by 2020.

What is the Apprenticeship Levy and who pays it?

Government funding for Apprenticeships has changed. An Apprenticeship Levy, a mandatory tax, was introduced for all employers with a wage bill that exceeds £3 million.

  • Levy on UK employers will fund growth in the Apprenticeship programme. In parallel, employers have been given more influence over how Apprenticeships are designed and paid for.
  • The Levy (0.5% of pay bill) is paid through PAYE. It applies to all employers in all sectors.
  • Employers in England who pay the Levy are able to get out more than they pay into the Levy, through a 10% top-up to their digital accounts.

Accessing Levy funds to spend on training

  • Levy funds are available through the digital service DAS.
  • Levied employers are able to select their PAYE schemes and access available funds. 
  • This will allow employers with multiple PAYE schemes and connected companies to aggregate Levy funds into one account. 
  • Employers are able to see their Levy contributions coming into the account monthly and accumulating over time.
  • Funds will appear on account after the employer has completed their RTI submission each month.

How funds in the account will be calculated

To calculate how much each employer has to spend through the English system, the SFA use data that HMRC already hold.

  • Employers will benefit from a 10% government top up to monthly funds entering an account.
  • Funds will expire in 24 months.

Purchasing training

Digital funds and government funding can be used for:

  • Apprenticeship training and assessment 
  • Against an approved framework or standard 
  • With an approved training provider and assessment organisation 
  • Up to the funding band maximum for that Apprenticeship

Digital funds and government funding cannot be used for:

  • Wages
  • Travel and subsistence costs
  • Managerial costs
  • Traineeships
  • Work placement programmes 
  • The costs of setting up an Apprenticeship programme

Provisional funding bands

Every Apprenticeship is placed in a funding band

  • All existing and new Apprenticeship Frameworks and Standards are placed within one of these funding bands (upper limits) 

Employers can negotiate with providers the best price for the training they require. 

Payments

  • Example: Accounting Framework L2 (Band 2)
  • 12 x £133 plus remainder £404 (20%)

Further information can be obtained from:
 https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work
 

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