Apprenticeship levy - are you ready for the new levy?

28 November 2016

The government is committed to 3 million new apprenticeship roles in England by 2020, but it's currently off the pace. Does your organisation need assistance preparing for the levy?

There was no further update in the Autumn Statement on the Apprenticeship levy. The following reiterates what we have previously explained.

The levy will be 0.5 per cent of the employer’s pay bill (this includes salary, bonuses, commissions, and share awards, along with anything else on which NICs are charged), to be collected through PAYE. A £15,000 credit is available to offset the apprenticeship levy liability (although connected employers must share this credit), so stand-alone employers, like foundation schools and academy schools, paying less than £3m per annum need not worry.

The levy is clearly aimed at encouraging and funding the costs of training these new apprentices (and similar measures elsewhere in the UK), working alongside the abolition of employers’ NICs for apprentices under 25, to raise apprentice numbers and hit the target.

Why is this important?

The Department for Education recently released its guidance on the funding process. This guidance (as well as separate guidance to be issued by the devolved governments in Scotland, Wales and Northern Ireland for their share of expenditure from the levy) is essential reading for employers who want to plan how to use the funds that will be in their digital accounts in May 2017. Although the deadline for using the funds has been extended from 18 months to 24 months, employers must plan ahead. We anticipate more details soon.

Please speak to your Authoritas contact if you need any information or assistance in your preparation for the levy.