If you are a business with a payroll of £3 million or more, you have 24 months to use it or lose it!
So read on to ensure that your business isn’t missing out…
What is the Apprenticeship Levy?
The Apprenticeship Levy was introduced by the government in 2017 to encourage and fund apprenticeships.
This means that if you are an employer with an annual pay bill of £3m or more (or if you’re connected to a business for Employment Allowance purposes which together total more than this amount), then you will be paying 0.5% into the Apprentice Levy ‘pot’ each year.
For example, if your business has an annual pay bill of £5,000,000, you pay £25,000 into the fund each year. This is deducted monthly by HMRC through your PAYE system, alongside tax and national insurance.
However, each business also has a £15,000 levy allowance which is subtracted from what you owe. So the actual amount of contribution in this case would be £10,000.
This amount appears in a digital account which can be used to spend on apprenticeship training and assessment – not apprentice wages.
Plus, the government top up the amount by 10% each month.
Your business then has two years to spend this amount or it is released to the government to redistribute.
Note: If you’re a non-levy paying employer, you can pay 5% of an apprentice course cost and the government pays the remaining amount through a process of ‘co-investment’.
Use it to train existing staff
Traditionally, when you think ‘apprentice’ you picture school leavers – or the famous BBC show!
However, if you’re looking to upskill your current workforce rather than bring in fresh talent, you can use the funding available to invest in your staff.
For instance, an employee in a mid-management position could undertake a 12 month apprenticeship course to obtain the skills they need for promotion. Or an experienced employee could train towards a formal qualification in a specialist area.
So, as well as filling the skill gaps within your business, your staff are motivated by the investment in their development, morale is boosted and retention is improved.
Did you know? Larger businesses can pass their levy funds to smaller businesses along their supply chain. These businesses don’t have to be related, but they must be in agreement over which apprenticeship courses the funds will be allocated to.
Six simple steps to get you started
1. Conduct a review of your existing workforce
2. Identify any skills gaps
3. Analyse the best way to fill these gaps
4. Consider developing existing staff, bringing in a new appreciate or hire a new department head
5. Create an apprentice service account
If you’re a UK employer who would benefit from investing in your workforce, increasing productivity and driving growth – this could be a very exciting prospect!
At Omega, we work closely with our clients to offer solutions and ideas. Being part of our managed service programme means that you benefit from management of all areas of recruitment. This includes keeping you informed about the many options available to you – including apprentice training.
Maybe this is something you hadn’t considered before?
Get in touch with our expert team today to see how you can partner with us and leverage every opportunity available.