Will I Be Affected By The Apprenticeship Levy?

Written on: 22nd February 2017
Written by:Amanda McCombie

A recent employer poll by City and Guilds highlighted staggering numbers of potential Apprenticeship Levy paying employers who still do not know anything about it.

The City and Guilds skills group asked 500 senior decision makers from a varied group of organisations about the impact the Apprenticeship Levy would have on their businesses and their recruitment strategy’s going forwards.

The results of this poll are outlined below.

  • Only 33% felt fully informed about the new rules
  • 28% were not sure whether it would affect their business
  • Only 31% said they would hire more apprentices because of the levy
  • Only 15% said they would have to cut other recruitment schemes to pay it

The survey also showed 87% of employers were struggling to fill vacancies, with 29% agreeing this was true of apprenticeship places as well as traditional vacancies.

Overall, 47% felt the Levy was a good way to get employers to pay for training, 43% said it gave them more control and 34% believed it would improve quality.

With 1/3  of potential Apprenticeship Levy payers not even aware of this new development in apprenticeships and skills funding, it is vital that we at Baltic Training do what we can to inform and educate those we work with to ensure that everybody who may be paying into the Apprenticeship Levy understand why how, and the benefits this will have on business going forward.

So, what is the Apprenticeship Levy?

From April, employers with a wage bill of £3mill or more will be required to put 0.5% of their annual payroll into a designated pot to fund apprenticeship training. The aim is to double spending on apprentices in England, resulting in three million new apprenticeships by 2020. From May, employers will be able to withdraw funds using their online account to fund apprentices. You can register online for that now.The registration for online accounts is now open and you can read more about the new Digital Apprenticeship service online on the Baltic blog.

What about employers who do not pay over £3mil?

When it comes to the levy, there are three categories that all employer will fit within;

Category 1 – A business with less than 50 employees and a salary bill of under £3mil.
These employers will not have to pay into the levy, and all training for apprentices ages 16-18 year old will be fully funded by the government. For all apprentices over 19, the government will contribute 90% of the apprenticeship funding, with the employer only having to contribute the remaining 10%. This funding can be used to upskill employees, including graduates, or to recruit apprentices of any age.
Category 2 – A business with more than 50 employees and a salary bill of under £3mil.
For these employers, the government will contribute 90% of the apprenticeship funding, with the employer only having to contribute the remaining 10%.
Category 3 – A business with a salary bill of over £3mil. 
These employers will contribute 0.5% of their pay bill over £3mill, and these funds will be accessed via their digital account. For all funds within the digital account, the government will top this up by 10%. This means for every £1 contributed by the employer, there will be £1.10 to spend on training.

For more information on the levy and to see how this will affect you, please visit our dedicated Apprenticeship Levy information page.

For all other queries please head over to our live chat or fill in our contact form. You can also sign up to receive monthly updates on all things Apprenticeships and all things Baltic by subscribing to Technically Baltic, our monthly tech newsletter by filling in the form below.

Stats taken from recent report by City and Guilds.

 

Written on: 22nd February 2017
Written by:Amanda McCombie