As of 1st May 2017 the way the government funds Apprenticeships in England has changed. Some employers are required to contribute to a new Apprenticeship Levy, and there are changes to the funding for Apprenticeship training for all employers.
The government have introduced the Apprenticeship Levy on 6th April 2017. The levy requires all employers operating in the UK, with a pay bill over £3 million each year, to invest in Apprenticeships.
How Do I know if I’m a Levy Payer
If your pay bill is over £3 million you are required to pay 0.5% into a levy pot which you can then spend on Apprenticeship training. You will then get a government allowance of £15,000 towards this and then a 10% top up on your final amount.
The payments roll over month to month but if not spent within 24 months they will expire and your money will be lost.
Annual wage bill £100,000,000
0.5% of this minus the government allowance of £15,000
£100m x 0.5% = £500,000 – £15,000 = £485,000
Remaining Levy £485,000
The government then tops up your pot with 10%
Final Levy pot would be £533,500
What if I’m Not a Levy payer
All other employers with a pay bill under £3 million are required to pay a 10% financial contribution towards any training for all staff that require Apprenticeships. The government will then fund the remaining 90% through the new co-investment payment scheme.
Recruiting 16-18 year olds
If you recruit or place any existing staff, that are 16-18, onto an apprenticeship you will be eligible for a £1000 incentive from your training provider.
Also if you have less than 50 employees in your organisation the government will pay 100% of the funding for a 16-18 year old apprentice.