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What you need to know

What is the Apprenticeship Levy?


Businesses started paying the levy in April 2017. The levy is designed to encourage businesses to embrace apprenticeships as a way of meeting their current and future skills needs. It funds Government’s ambition to support 3 million high quality apprenticeships over the life of the current Parliament, i.e. 2015 to 2020. settings and press "Manage Questions" button.




Who pays the Levy?


All employers in the UK with a payroll bill greater than £3m per year pay the levy and it applies to employers in all sectors – including those already covered by statutory levy arrangements (e.g. construction and engineering construction).




How much do I have to pay?


The levy is charged at 0.5% of payroll. All employers receive an allowance of £15,000 to offset against payment of the levy. So only employers with payroll bills greater than £3m have to pay the levy. There is a ‘connected persons’ rule, so if you operate multiple companies or payrolls, you are only able to claim one allowance and you can choose how to divide the allowance between the different connected companies. For the purposes of the levy, payroll includes all wages, bonuses, commissions and pension contributions on which NICs are due. In technical terms, payroll means the total earnings upon which Class 1 secondary NICs are paid. It doesn’t include other payments such as benefits in kind.




How will the Levy payments be collected?


The FAQ title can be adjusted in the settings tab of the App Settings. You can also remove the title by unchecking its checkbox in the setThe levy is collected monthly through Pay As You Earn (PAYE) alongside Income Tax and National Insurance.Your £15,000 levy allowance is translated into a monthly allowance of £1,250. If your levy liability in a given month is less than £1,250, you don’t have to make a levy payment that month. Any unused allowance will be carried forward into the following month(s) until you’ve used it. If the reverse is true, and you find that you have made levy payments, but not used all of your allowance, you will be given a credit that you can offset against other PAYE liabilities.At the end of the tax year HRMC will operate a rebate system to make sure that you pay the right amount of levy.tings tab.




How do I access my Levy?


You can manage your levy through an account with the Digital Apprenticeship Service, where you can see the funds from April 2017, and spend your first funds from 1st May 2017.




What is the Digital Apprenticeship Service?


The Digital Apprenticeship Service is an online portal/account for all of your Levy related information. On your account you will be able to: See the levy funds you have available to spend in England; Select apprenticeship frameworks and / or standards you want to use; Confirm the training provider(s) you want to use to deliver your apprentices’ training; Confirm the price you’ve agreed with your training provider; Pay for apprenticeship training and assessment; Choose an assessment organisation; Post apprenticeship vacancies; Transfer up to 10% of your apprenticeship levy between companies from 2018.




How many apprentices can I train?


There is no upper limit on the number of apprentices one organisation can have. Once you have fully utilised your levy, along with the government top-up, you will still be able to offer further apprenticeships. Government will pay up to 90% and you’ll pay 10% of the costs for activity that exceeds your levy. You may also want to top up your levy to deliver the programme that’s right for you in terms of the breadth of activities you want to include in your programme, over and above what’s required to fulfil the apprenticeship rules. There will be nothing to stop you doing this and paying training providers directly for this.




How long do I have to spend my Levy?


Businesses started paying the levy in April 2017. You have 24 months from May 2017 to spend your levy before you ‘lose’ it and can’t get out everything that you’ve paid. As you think about your levy, it’s worth considering the lead times involved in building a substantial apprenticeship programme, in terms of: The time it might take to design the programme that will really work for your business; Getting buy-in from across your business; Mobilising to deliver with whichever training provider(s) you choose; Recruiting the right individuals.





We appreciate how busy the week can get, so here's our at a glance guide to the Levy.

WHO WE WORK WITH

Providing apprenticeships across Hertfordshire, Bedfordshire and London

 

To find out more, contact:

John McMahon

Managing Director, Together Training

Mobile: 07500 126450 

Landline: 01923 812150

John.McMahon@togethertraining.co.uk