Apprenticeship Levy is a tax on employers in the UK with an annualised salary bill of over £3m. The apprenticeship levy is used to fund apprenticeship training for employers through the government gateway which as an employer you must use by creating an account.
The apprenticeship levy was first announced back in 2015 by the government, however it didn't come into affect until May 2017.
The levy is a tax on companies which goes into a central pool to help fund apprenticeship training for employers and young individuals and tackle the major skills crisis we are experiencing in England. The levy is charged at 0.5% of total payroll bill for companies who have a payroll of over £3million per annum, it is estimated the levy generates over £3 billion per annum to help fund apprenticeships.
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As stated previously each employer, whether you take on apprentices or not, are required to pay into the fund and the government tops this up by 10%. The monies are then held in a sort of "digital bank account" that apprentice employers can access via they employer portal. If an employers does not use the funds sat in their account within a two year period those monies are then absorbed by the HMRC including any uplift they added.
Monies for apprenticeship training are paid directly to the apprenticeships training provider on a monthly basis via the digital account for the whole term while the apprentice is in training. You must use an approved apprenticeships training provided which are available through the portal.
Apprenticeship levy funds paid in by companies can add up to quite a tidy sum and in a lot of cases sometimes be too big to spend, by themselves. The apprenticeship levy made provisions for companies to be able to allocate up to 10% of their funds and only to one company.
This is great as enables lager companies to work with smaller SME's who don't necessarily have the money for apprenticeship training. Allocating money in this way helps to keep their supply chains going and encourages the SME's to introduce apprenticeship training as part of their offering. Allocation of levy funds works so well that the government has extended the amount companies can allocate to 25% and put no cap on the number of companies the levy is allocated to.
How do we pay our apprenticeship levy?
Apprenticeship levy payments are paid directly to the HMRC through your normal payroll system, in the same way you pay the HMRC for employee tax or national insurance. Your levy payments are paid on a monthly basis and can be accessed via your digital account
There are plenty of reasons why you should be paying into the levy, however the simplest answer is you are required to by the government. The government identified, better late then never, that the UK was heading for a major skills crisis and that young people were being offered jobs due to lack of experience. So the apprenticeship levy was introduced to sort of force the hands of employers to act on this and start focusing their attentions on training through apprenticeships.
Having a tax inlace makes sure companies have the money and resources available to train both new and existing staff.
Apprenticeships is a form of further education which offers on the job training for you to gain a nationally recognised qualification whilst studying part-time with an apprenticeship training provider, college or university through workshops or classroom training.
Apprenticeship training has to be delivered by a registered apprenticeship training provider which can also be an employer-provider, where the employer you are training through are on the register of training providers to be able to deliver their own training requirements. If an employer acts as an employer-provider they will usually employ a number of people such as Apprenticeship Assessors, Mentors and Managers to support you through your apprenticeship programme.
During your apprenticeship you will receive a salary and all the other benefits permanent employees receive. An apprenticeship job is only for a specified time as stipulated at the beginning of your apprenticeship training which can last anything from 12 months to 5 years.
To find our more about apprenticeships please refer to our What is an Apprenticeship? guide.
Why should you start an apprenticeship?
If you are considering your post 16 options you probably wouldn't have considered an apprenticeship a few years ago and would be struggling or worrying what to do when you leave school. It is a legal requirement for you to now stay in some form of further education until the age of 18 and you now have three options A-Levels, College or an Apprenticeship.
You can start an apprenticeship at the age of 16 through the Intermediate or Advanced level apprenticeship programmes across many industry sectors from Construction, Technology or even Marketing. There are no entry requirements for the intermediate apprenticeship, however you will need at least 5 GCSE's at grade 4 (previously C grade) or above to qualify for the advanced apprenticeship. On completion of the intermediate you will gain the qualifying criteria for a level 3.
The best reason for starting an apprenticeship is on completion of each level you will receive a nationally recognised qualification from an NVQ all the way up to a degree level apprenticeship such as a Bachelors or Masters.
How can you become an apprentice?
There are a number of ways to become an apprentice so we thought we would list them for you:
- Register with websites like ourselves, there are others available.
- Apprenticeship Job Fairs are great for meeting employers and training providers.
- Contact training providers in your area, a simple Google search "Training providers near me" will give you the information you need.
- Contact your local colleges or universities or visit their websites to see if they offer apprenticeship training.
- UCAS promote apprenticeship opportunities on their website on behalf of employers.
- Do some research on apprenticeships and find a topic or industry that you would like to start an apprenticeship in and then research local companies in those sectors and visit their websites to see if they offer apprenticeship training and apply directly with them.
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