Shipleys LLP

Chartered Accountants and Professional Business Advisers

Your business might be required to pay the new apprentice levy from April 2017, but will you get anything in return?

The new apprenticeship levy forms part of the Government’s plan to create three million new apprenticeships by 2020. It’s hoped that businesses will see an increase in productivity as result of apprentice training and that, by boosting the quantity and quality of apprenticeships, more employers will consider them.

How much will it cost employers?

UK employers will be charged 0.5% of their total payroll cost each pay period, but subject to an annual ‘levy allowance’ of £15,000. This means that only employers with a payroll bill of more than £3m a year will be required to contribute.

What do employers get for their contribution?

The monthly contributions will be credited to a Digital Apprenticeship Service account (DAS) in the form of electronic vouchers, which businesses will have 24 months to use. The Government will also add 10% to the fund, meaning that for every £1 paid in, the employer gets £1.10 to spend. DAS vouchers can only be spent on training from a provider listed in the Government’s register of apprenticeship training organisations (RoATP).

You can choose from two types of apprenticeship training:

  • Apprenticeship standards – each standard covers a specific job role and sets out the core skills, knowledge and behaviours an apprentice will need to be fully competent in and able meet an employer’s needs. A wide variety of jobs are covered and some are roles within organisations, such as HR support, IT network engineer or assistant accountant, while others are related to specific industries, such as broadcast production assistant, chartered surveyor, financial services administrator or golf club greenkeeper.
  • Apprenticeship frameworks – a series of work-related vocational and professional qualifications, with workplace and classroom-based training. This frameworks approach will be phased out between now and 2020, as the transition to employer-led apprenticeship standards is made. If you want to spend more on training apprentices than the value of your DAS account vouchers, the Government will fund 90% of the extra cost.

Don’t miss out

The scheme isn’t just for new recruits – it can also fund learning and development for your existing staff. To qualify the apprentice must be employed in a real job, working towards one of the standards or frameworks over at least 12 months, and with off-the-job training at least 20% of the time.

https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/

For further details, please speak to your usual Shipleys contact.

Tell us how you get on

It’s tempting to dismiss this sort of opportunity on the basis that it will involve endless forms and bureaucracy to access overpriced training! We will be looking at the scheme in more detail – employers won’t be allowed to avoid the cost but may overlook or ignore the benefits.

We’re interested in your experiences of the new scheme – so please do let us know how you get on.