The Government is committed to achieving three million Apprenticeship starts by summer 2020. If achieved this will be a 35% increase compared to the previous five years. Aiming to also increase the quality of Apprenticeships in England, the Government is putting control of funding in the hands of employers.
The new Apprenticeship Levy, announced by the Government in the 2015 Autumn Spending Review and due to be introduced in April 2017, will affect all public and private sector employers with a payroll of £3m or more. Every employer whose payroll is in excess of £3m will have a mandatory requirement to pay 0.5% of their payroll value as an Apprenticeship Levy. It will be paid to HMRC via PAYE. The government estimate that only 2% of UK employers will come in scope for the levy and that that it will generate £3bn by 2020 which will be ring fenced for the funding of apprenticeship delivery.
All employers will have an allowance of £15,000 to offset against the levy costs and so employers with a total payroll of £3m or below, will not have to pay any levy
Total payroll £3M, 0.5% levy = £15,000 less allowance of £15,000, levy cost = £Zero
Total payroll £5M, 0.5% levy = £25,000 less allowance of £15,000, levy cost = £10,000
The Government has said it will set up an Institute for Apprenticeships to set standards and ensure quality of apprenticeship delivery and a new Digital Apprenticeship Service is being developed that will, amongst other features, facilitate the management of the funding and the Levy.
Following the headline news and key facts, there are still a large number of details the Government has yet to clarify, which we can expect as the year progresses. More details can be found on the Government website.
If you are looking to get ahead of the government policy and are interested in giving an enthusiastic young adult an opportunity within your company, please get in touch with us now or visit our Companies Section on the website to see how SEAC can work for you.
BREAKING NEWS - Nick Boles has confirmed that small employers won't join the apprenticeship levy system until 2019. Click for more details
Please see the below attachment for a list of FAQs that we have put together to help answer some of your questions, but bear with us because there are still so many questions that we don’t have the answer to yet!