One of the hot topics discussed by the current Government at their July 2015 budget, was the intention of introducing a levy on large employers to enable the funding of 3 million new apprenticeships and similar schemes.
The aim of the levy is to support post-16 apprenticeships in England, and in doing so essentially enhance funding to employers so they can meet their individual needs.
The government formed a consultation in August 2015 in order to discuss the launching of the levy – the response to this consultation was published on the 25/11/2015.
Response to consultation
In summary, these are the things you should know about the Apprenticeships Levy:
- It will come into effect in April 2017
- It will be payable by employers across all sectors in the UK at 0.5% of paybill.
- All employers will receive an annual allowance of £15,000 against the levy, in effect making the levy payable only to the extent that the employer’s paybill exceeds £3 million per year.
- This means that fewer than 2% of employers will pay any levy at all.
- Connected employers, such as a group of companies, will only receive one allowance
- Paybill will be calculated based on total employee earnings but not including benefits in kind.
- Funding for training will be accessible to all employers in England via the Digital Apprenticeships Service. Employers who pay the levy will be able to access more funding than they have put in, through government top-ups.
- However, levy funding which is not used within two years will expire, making it available for other employers.
- Apprenticeships are a devolved matter in Scotland, Wales and Northern Ireland. Employers in the whole of the UK will have to pay the levy but the government is liaising with the devolved administrations over their arrangements for giving employers access to the funding.
- Legislation to allow the imposition and collection of the apprenticeship levy will be introduced in the Finance Bill 2016. (Source: Practical Law Company)
The full response to the consultation can be found here.
For further information on apprenticeships or any aspect of HR and employment law contact us on 0114 3032300 or email email@example.com.