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Under the spotlight: Taking advantage of the apprenticeship levy

Under the spotlight: Taking advantage of the apprenticeship levy

In our October 2016 newsletter we explained how the delivery of apprenticeships in the UK is changing. Groups of employers (trailblazers) are now able to develop their own apprenticeship standards, allowing them to set out the skills and competencies required by apprentices working in their industry – just like the Motor Finance Specialist Standard will do for the automotive sector.

How will the levy work?

The new apprenticeship levy, that will be applied from 1st May 2017, will require employers with an annual pay bill of over £3 million to pay a 0.5% levy on their payroll costs (earnings subject to class 1 NI contributions).  An allowance of £15,000 a year  will be provided by the Government. Small businesses that do not exceed the threshold will only be required to contribute 10% of apprenticeship training costs, with the Government ‘co-investing’ the other 90%.

Money paid towards the apprenticeship levy can instead be redirected to pay training providers and other costs associated with apprenticeship training through a new digital account with HM Revenue and Customs. Moreover, the Government will apply an additional 10% top up to the funds that enter an employer’s digital account.

Finding out more about the levy and the benefits of apprenticeships

There are clear incentives for businesses to invest in apprenticeships which can help attract new talent, upskill existing staff, increase employee loyalty and tenure and offer opportunities for career development.  2.4m apprenticeships started over the last parliament with Government funding of £1.6bn to support.  For every £1 invested by Government £28 of economic benefits were generated for those at level 3.

For more information about the levy, please click here.  Employers can also sign up to the Skills Funding Agency’s Business Update to receive alerts which provide up to date information about apprenticeship policy.

There is also free support available to businesses through the National Apprenticeship Service (NAS) hotline.  If you are interested in learning more about employing apprentices or becoming an apprentice, the Motor Finance Specialist Apprenticeship or would like more information about the apprenticeship levy please call 08000 150 600 and tell the adviser you are registered to use the FLA’s SAF initiative.