The Apprenticeship Levy: Key Information for Employers      

From April 6th 2017 the Apprenticeship Levy will come into effect across the UK, having an impact on both large organisations and SMEs.

With many businesses and people affected, Wirehouse think it’s about time employers prepared for these significant changes to apprenticeship funding:

What Is The Apprenticeship Levy?

It doesn’t matter whether you are a fairly new business, an emerging SME or a large organisation, you need to know exactly what the Apprenticeship Levy is.

The Apprenticeship Levy is a payment made to the government by large organisations and employers in the public and private sectors.

Its purpose is to encourage employers to invest in apprenticeship programmes whilst raising funds to increase the quantity and quality of apprenticeships across all sectors. The levy is used to fund apprenticeship training within the business.

How Will It Affect Your Business?

It is larger organisations and companies that will be greatly affected by the introduction of the levy and employers with a wage bill of more than £3million will be required to pay a levy.

There will also be a new funding system put in place for those businesses that run apprenticeship programmes. This aims to increase business control in deciding about the apprenticeship training needed.

Due to a new digital system (digital apprenticeship service) being put in place the employer will now be able to choose the apprenticeship you want, the training provider and agree the cost.

It is proposed that for those employers paying the levy, the government will contribute a 10% top-up, so if an employer pays in £1 they will then have a fund worth £1.10 to spend on apprenticeship training. However, this has not yet been confirmed.

In terms of SME’s the unused levy funds created by large organisations will be used by the government to fund apprenticeship training in SME programs.

How Can You Prepare For The Changes?

Although these changes may not affect your business directly it is important to make sure that you take the time to read over the proposed changes. This is so that for any apprenticeships you offer in the future or if your wage bill ever becomes more than £3 million you are prepared.

Wirehouse, HR and Employment Law specialists can provide support by advising you on how your business will be affected and assessing which procedures you need to have in place if the levy affects your organisation.

You will gain a better understanding of how apprentices can benefit your business and ensure that you are prepared for any apprenticeships you are looking to take on in the future.

No matter what these changes mean for individual businesses it is agreed that this levy aims to raise not only the awareness of apprenticeships but also their positive impact on the future UK workforce as a whole.