In the Spring of 2017 the Government will be changing the way Apprenticeships will be funded. Some employers will be required to contribute to a new “Apprenticeship Levy” and there will be changes to the funding for apprenticeship training for all employers.
The Levy will be introduced on 6 April 2017 and all employers operating in the UK with a wage bill of over £3 million each year, will be required to invest in Apprenticeships.
Those with a wage bill of over £3 million, from the start of April 2017, will be required to pay 0.5% of their wage bill through PAYE (Pay As You Earn).
Those paying the Levy will be given an allowance of £15,000 per year to offset against this. The Government will give employers a 10% top-up of their monthly levy contributions.
This will all be done through the “Digital Apprenticeship Service” where employers will pay for their training and assessments.
In addition, if the apprentices are aged between 16 and 18 years old, an additional £1000 will be received.
Non Levy Payer
As a non-Levy payer, your wage bill will be under £3 million, you will not be required to use the Digital Apprenticeship service until 2018, but the way Apprenticeships are funded will still change for you.
Individual Apprenticeship frameworks and standards will be allocated a funding band with an upper limit which the Government will co-invest towards. 90% of the agreed training and assessment will be funded by the Government and the employer will pay 10%. Payment for the 10% can be spread over the lifetime of the Apprenticeships.
The AGE grant will continue for small employers taking on an Apprentice aged between 16 and 24 years until the end of the 2016/2017 academic year. Those employers with 49 or less employees, the Government will pay 100% of the training cost.
There will be an additional payment from the Government of £1,000 for non-Levy employers in two equal payments at 3 months and 12 months, paid through the training provider.
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