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In May 2017 the way the Government funds Apprenticeships in England is changing

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 requires all employers operating in the UK, with a pay bill over £3 million each year, to invest in apprenticeships.  Employing apprentices will give your business the cutting edge in vocational skills and training, driven by employers just like you.

Our Apprenticeship pages provide information on how the apprenticeship levy will work. It also provides an outline of the principles that apprenticeship funding will operate on from 1 May 2017, whether you pay the levy or not.

 

Who this information applies to

This information is for all employers operating in the UK, whether you pay the apprenticeship levy or not.

If you’re an employer with operations in Scotland, Wales or Northern Ireland, you may also want to contact your apprenticeship authority:

·         Scotland

·         Wales

·         Northern Ireland

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

 

Will I need to pay the Levy?

As an employer, you’ll have to pay Apprenticeship Levy each month from 6 April 2017 if you:

·         Have an annual pay bill of more than £3 million

·         Are connected to other companies or charities for Employment Allowance which in total have an annual pay bill of more than £3 million

Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions.

You must include payments to:

·         All employees earning below the Lower Earnings Limit and the Secondary Threshold

·         Employees under the age of 21

·         Apprentices under the age of 25

Your pay bill doesn’t include:

·         Earnings of employees under the age of 16

·         Earnings of employees who aren’t subject to UK NICs legislation

·         Earnings on which Class 1A NICs are payable, such as benefits in kind

 

What you can spend apprenticeship funding on - all employers

Funds in your apprenticeship service account, and funding provided by the government through co-investment, can only be used towards the costs of apprenticeship training and end point assessment. This must be with an approved training provider such as i2i and an approved assessment organisation.

Funds can’t be used on other costs associated with your apprentices or wider training. For example wages, statutory licences to practise, travel and subsidiary costs, managerial or brokerage costs, traineeships, work placement programmes or the costs of setting up an apprenticeship programme.

 

Official Government Information on the Apprenticeship Levy  - 

https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

Current Apprenticeship standards available -

https://www.gov.uk/government/publications/apprenticeship-standards-list-of-occupations-available

HMRC Guidance on paying the levy -

https://www.gov.uk/guidance/pay-apprenticeship-levy

How to register for the Apprenticeship service for Levy paying employers -

https://www.gov.uk/guidance/manage-apprenticeship-funds

Skills Funding Agency Funding Rules -

https://www.gov.uk/government/publications/apprenticeship-funding-and-performance-management-rules-2017-to-2018