Apprenticeships for Employers

The Apprenticeship Levy

The Apprenticeship Levy; what is it and why is it important ?

The Apprenticeship Levy fundamentally changes the way Apprenticeship Funding flows; for larger employers a levy will be charged via the tax system, collected into a pot and made available to employers via the new Digital Apprenticeship Service (DAS). Employers will then be able to choose a training provider, course and candidate, with DAS's help.

  • The Levy will apply to all UK Employers
  • But, is only payable on annual 'pay' bills of £3 million +
  • Employers whose 'pay' bills are less that this threshold  will continue to have access to Government Apprenticeship Funding in the current way
  • Less than 2% of employers will pay
  • 0.5% of the employers 'pay' bill will be taken directly  via PAYE
  • There will be a £15k fixed annual allowance for employers to offset against the levy
  • The Levy will be collected via HMRC and then made available via the new Digital Apprenticeship  Service (DAS); employers will then be able to use this to pay for Apprenticeship training.
  • DAS will help employers to identify training providers, choose a course and find a candidate
  • DAS will be fully operational by April 2017
  • Employers will be able to use funding up to a cap dependant on the framework/standard, this is to cover costs of training, assessment and certification
  • It cannot be used for other associated costs such as cost of supervision or apprenticeship wages
  • Employers cannot spend an unlimited amount on one single apprenticeship, caps will vary - the higher standard, quality and level, the higher the cap
  • The Levy can be used on existing staff or new recruits
  • Levy funds can only be used with an approved SFA training providers, so employers can either buy in via an approved provider, or become one themselves - subject to the usual SFA criteria, including Ofsted inspections
  • Some employers will want to direct their funding to their suppliers, this will be made possible
  • The Levy is designed to put apprenticeship funding in the hands of employers and encourage take up
  • Engaged employers will be able to get more out than than they put in via a monthly 10% digital top up
  • Unused funds will be reallocated to committed employers
  • The Institute of Apprenticeships  will be established to regulate quality, set caps and approve standards and assessment

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