Since the apprenticeship funding changes took affect on 1st May 2017, investment in apprenticeships in England has risen to over £2.5 billion, double the amount spent in 2010-11.
The apprenticeship levy generates long term sustainable funding for companies to provide their employees with a larger range of training opportunities and to grow and strengthen their workforce with fresh insight and enthusiasm from the next generation. Over the past two years, around 313,000 people have started a new apprenticeship and the increase in funding has resulted in more freedom of choice for employers as to when they offer apprenticeships, how many they provide and when they start.
The levy was introduced to increase apprentices across all employers, irrespective of size, so although only 2% of businesses currently pay the levy each month, the DfE recently announced that it’s directly supported almost 50% of all apprenticeships in 2017-18.
If your pay bill is £3m or above per annum you make a levy payment of 0.5% of your total annual pay bill via monthly PAYE payments to HMRC. You can then access your funds via the online apprenticeship service to invest in apprenticeship schemes.
Businesses now have 24 months to spend their funds, instead of the 18 months originally allowed and can also transfer 25% of their levy funds to other employers if they so wish.
If large employers’ funds expire, they are used to support existing apprenticeships through training support for the employee and employer.
Small employers who do not pay the levy receive 95% cost cover for their apprenticeship training costs.
The Department for Education (DfE) recently updated it’s guidance Apprenticeship Funding: how it works
For a quick summary of how the process works read our previous blog: Apprenticeship Levy Changes
SAAF Education automatically calculate whether our payroll clients need to pay the apprenticeship levy and make the payment to HMRC on their behalf.