APPRENTICESHIP LEVY

A topic for so many MD’s, Finance Directors and Business Owners proving difficult is understanding how the Apprenticeship Levy can be used to add real value to their business, and therefore seeing this as a “stealth tax”.

Utilisation of Apprenticeship Levy funds paid into Digital Apprenticeship Service Accounts is only at 10%, meaning not enough employers are finding the RIGHT Training Provider.

Too many providers offer “off the shelf” Apprenticeships, while failing to understand the specific needs of the employers expectations.

Many ways Levy Employers can add value to their business, is by utilising the Levy as a Funding mechanism, but just don’t know how.

So, if you’re a Levy Employer and want to understand how to make the Apprenticeship Levy work for you, please don’t hesitate to get in touch.

Monarch  proud to be impartial and therefore, the advice and guidance we give will be bespoke to your needs.

Her Majesty’s Government announced in November 2015, that all employers with an annual wage bill in excess of £3m, are required to pay the Apprenticeship Levy.

 

From April 2017, the Apprenticeship Levy has supported Government in the goal of achieving 3 million Apprenticeship starts by summer 2020.

The Apprenticeship Levy affects 2% of UK employers.

Any employer with a wage bill of £3,000,000 or more, automatically has 0.5% of their wage bill collected through their PAYE scheme.

These funds are stored in their Digital Account.

The Government apply a 10% top up of all Levy funds in their digital account.

After 24 months, the Levy funds will expire, unless they are spent on Apprenticeships.

Monarch College can help you access your Apprenticeship Levy account, discuss Apprenticeships and their benefits to you and your existing workforce.

There is a £15,000 allowance for employers not connected to another company or charity.

The allowance reduces the amount of the Apprenticeship Levy you have to pay over the year.

Funds must be spent on Apprenticeship training and assessment for Apprentices who work at least 50% of their time in England.

You only pay up to the maximum funding band for that Apprenticeship.

If Apprenticeship costs go over the funding band maximum, you pay the difference with other funds from your own budget.

Funds in the Digital Account can’t be used to pay the following relevant costs

  • Wages
  • Travel
  • Work place programmes
  • Set up of the Apprenticeship programme
  • Professional licenses required to practise

 

For more information, contact us for a free consultation about how we can support you in Apprenticeship delivery.

An organisation in a group of companies, paying the levy together, can collect their funds into a single account.

Please see this website, where you can read more about how to register connected organisations 

Companies can transfer funds to any employer, including smaller employers in their supply chain, and Apprenticeship training agencies.

Initially, 10% of the annual value of funds entering the Digital Account can be transferred.

Employers transferring funds must agree the Apprenticeships to be funded with the employer receiving the funds.

The transferred funds must only be used to pay for training and assessment for Apprenticeship standards and not Apprenticeship frameworks.

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