On 6th April 2017, the government introduce the change of funding for apprenticeships in England. Employers operating in the UK, with a pay bill over £3 million each year is required to make an investment in apprenticeships. Employers will be required to contribute to a new Apprenticeship Levy.
The Apprenticeship Levy is being introduced as part of the government’s plan to help fund 3 million new Apprenticeships by 2020. The levy will invest in the increase of the quality and quantity of apprenticeships in England. Employers can benefit from this investment by training apprentices.
The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.
Employers Guide to the Apprenticeship Levy: When will you need to pay the levy
As an employer, you’ll have to pay Apprenticeship Levy each month from 6 April 2017 if you:
- Have an annual pay bill of more than £3 million
- Are connected to other companies or charities for Employment Allowance which in total have an annual pay bill of more than £3 million
Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions. You must include payments to:
- All employees earning below the Lower Earnings Limit and the Secondary Threshold
- Employees under the age of 21
- Apprentices under the age of 25
Your pay bill doesn’t include:
- Earnings of employees under the age of 16
- Earnings of employees who aren’t subject to UK NICs legislation
- Earnings on which Class 1A NICs are payable, such as benefits in kind
How much you need to pay
Employers who aren’t connected to another company or charity will have an Apprenticeship Levy allowance of £15,000 each year.
The allowance reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year. This means that only employers with an annual pay bill of more than £3 million will pay the levy.
You can’t carry over any unused allowance into the next tax year.
Connected companies or charities will only have one £15,000 allowance to share between them.
If you start or stop being an employer part way through the tax year you can use your full annual Apprenticeship Levy allowance against the amount of the levy that you owe.
To find out how to allocate your payments, reporting your payments, how to pay and how the levy will affect different sectors please visit Apprenticeship Levy Pay
Please visit the links below for further information on how the Apprenticeship Levy works and how the levy will affect employers.
Apprenticeship Levy- Training Apprentices
Once you decide to buy apprenticeship training through the apprenticeship service, the funds will be taken from your account each month to pay the training provider and the assessment organisation.
You can use funds from your account up to the funding band maximum, and if you agree a price in excess of this, you will need to cover the balance
Once the apprenticeship training you’ve bought has started, monthly payments will be automatically taken from your account and sent to the provider. The provider will pass funds on to the end point assessment organisation.
You will see funds entering your account each month as you pay the levy, and funds leaving the account each month as you pay for training.
For more information about training and apprenticeship funding please click here
With the introduction of the levy, there is still a lot of confusion about the funding and payments. Please click here to view the facts and myths of the levy.
Funding proposals: Apprentice Funding Proposals for May 2017
HETA Apprenticeship Levy meeting
HETA hold regular meetings to inform our employers of Levy updates - please see below the latest slides
Apprentiship Levy Presentation - Mar 2017
Apprenticeship Levy Presentation - Nov 2016
The next meeting will be held on Thursday 18th May (9am start) at our Scunthorpe Centre. To reserve a space contact - email@example.com
Lastest Levy News:
Please visit the links to see the updates Levy news articles:
Advice & Guidance
The HETA team can offer support with levy queries such as:
- Setting Up DAS systems
- Payment Calculations
- ATA queries
- Training Requirements
To set up a consulation contact your account manager on:
Scunthorpe / North Lincolnshire - firstname.lastname@example.org / 033033 31501
Grimsby / North East Lincolnshire - email@example.com / 01469 552881
East Hull & Holderness - firstname.lastname@example.org / 01482 372677
West Hull, Goole, Selby & York - email@example.com / 01482 372673