Current Apprenticeship Reforms
The Apprenticeship reforms have elevated Apprenticeships making them more attractive than ever to aspiring professionals and top employers.
The Apprenticeship Levy is a new government training levy that has recently come into effect (May 2017). It means that all employers with an annual wage bill of over £3 million will be required to pay a 0.5% tax which is to be spent on training new apprentices and current staff.
What does this mean for businesses?
The levy will affect businesses in the following ways:
- The levy will be charged at a rate of 0.5% for any annual pay bill exceeding £3 million in a given year. A business will only pay the levy if the pay bill exceeds £3 million (£250,000 on a monthly basis).
- Businesses have to pay a levy allowance of £15,000 per year to offset against the levy.
- The government provides a 10% top up on all levy contributions relating to your english pay bill that must be spent on employees working in England.
- Where levy funds have been maximised, the SFA will pay 90% of the negotiated training cost for additional apprentices, on the condition that the employer pays the final 10% to the training provider.
- A 90% subsidy will be applied by the SFA for employers with no levy account, on the condition that the employer pays the final 10% to the training provider for all apprentices they employ.
- The new funding system came into effect on the 1st May 2017. All apprenticeships starting after this date will be funded according to the new rules. Any apprenticeships that started prior to this date will be subject to the old system.
There are many ways we can help you maximise your return on the new levy investment. Even if your levy calculation is £0 you could still qualify for a subsidy. If you’d like to find out more please contact us and we’ll set up a meeting with our Employment Engagement Officer.