THE APPRENTICESHIP LEVY AND YOU. What you need to know
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1 THE APPRENTICESHIP LEVY AND YOU What you need to know
2 In a bid to increase apprenticeships in line with its party manifesto, the Government has announced a new Apprenticeship Levy, which will be payable by all businesses with an annual payroll bill in excess of 3m. With the new levy coming into effect in April 2017, here's what you and your organisation need to know.
3 Introduction The Apprenticeship Levy will directly fund Apprenticeship training programmes, with the aim of increasing the number of people in apprenticeships to 3 million by It will mean employers can take control, and benefit from a further 3bn that will be added to the Apprenticeship pot over the course of the next five years. At a glance, the Apprenticeship Levy and you The key numbers: April m 0.5% 15,000 Under 25s The date when the first payments are due. The amount your wage bill needs to be in excess of to trigger payment. The Apprenticeship Levy rate. Payment is based on your employee earnings (gross) and will be calculated from the same figure used for Class 1 NICs (bonus payments included). The allowance available to all employers with a payroll bill of 3m or less. The apprentice age group you will no longer have to pay NICs on. Need to know more? Call or log on to 3
4 What's the levy for? The Government aims to have 3 million Apprenticeship starts in place by The levy is a way of covering the cost of Apprenticeship training via one central pot, whilst ensuring the huge benefits of Apprenticeships training are reaped by firms of all sizes. So why now? As part of their 2015 manifesto pledges, the Conservative Party made a commitment to not only increasing the number of apprenticeships, but also the quality and standards by which they are implemented. The goal of reaching 3 million over the course of this Parliament, itself a 30% increase on the previous five years, as well as creating a more rigorous regime, at a time when budgets are being cut and tax receipts are down, has made it necessary for funding costs to be sourced elsewhere. Hence the Apprenticeship Levy and the call for employers to have a greater involvement in both training and funding the workforce of the future. Ofsted has stated that there are still too few year olds taking up apprenticeships and that not enough is being done to promote the benefits they bring to both the employer and the economy. The measures being introduced to help combat this, as part of the Government's overall plan to strengthen the reputation of their training programmes, include giving apprenticeships the same legal status as degrees, setting apprenticeship targets for the public sector, and exempting organisations from National Insurance Contributions for apprentices under the age of 25. The Apprenticeship Levy will bring England into line with other modern economies, where the co-funding of apprenticeships by the interested parties employer and Government is already the standard model. How does it affect me? Payroll bill Over 3m Below 3m, above 50 employees Below 3m, under 50 employees Your business Is a Levy payer Is Co-funded for apprenticeship training Is Fully Funded for Apprenticeship Training of yr olds OR/AND yr olds care leavers, or 19-24yr olds with an education and healthcare plan Is Co-funded for Apprenticeship Training of people 19+ What you pay 0.5% of payroll bill above 3million 10% of the cost of training You do not need to pay for apprenticeship training 10% of the cost of training 4 Need to know more? Call or log on to
5 Levy Payer If your payroll bill exceeds 3m, your business is classed as a levy payer and you will have to pay. Only your payroll bill above 3m incurs a tax, set at 0.5% and deducted from your PAYE. There is also a tax allowance for your payroll bill up to 3m. Example: An employer with an annual pay bill of 5 million: Levy sum: 0.5% x 5,000,000 = 25,000 Allowance: 25,000 15,000 = 10,000 annual payment As a Levy Payer what you can do is take control and ensure you maximise your return from the Apprenticeship Levy scheme. One of the benefits of the scheme is that it places control of apprenticeship funding into the hands of the employer. This allows you to invest in your current apprentices, take on more and upskill existing staff to help secure the future of your organisation. Take advantage of our FREE consultation service As long as you are offering recognised apprenticeship training, typically bought in from a college or independent provider, you can take advantage of the allowance. Generally, most organisations will get more out of the scheme than they put in. Our FREE expert consultation service is designed to help businesses like yours get the most from the Apprenticeship Levy. See page 7 for more details or contact John Adams (Director of Commercial Projects at Walsall College) on or jadams@walsallcollege.ac.uk Co-funded Business If you have a payroll bill of less than 3m and over 50 employees, you will be Co-funded for apprenticeship training. Through the money generated by the apprenticeship levy, the government will pay 90% of the cost of apprenticeship training, 10% will need to be paid to the training provider. As well as taking on new apprentices, this funding can also be put towards training existing staff, as long as the apprenticeship training is relevant to their job and will assist in their career development. For more information on making the most of this funding, contact: John Adams (Director of Commercial Projects at Walsall College) on or jadams@walsallcollege.ac.uk Fully Funded Business (16-18 Training) Your business will benefit from additional funding for training year old apprentices, even though you are not paying into it! For training that applies to anyone that is 19 or over, you will pay 10% of the cost of training. Take advantage of the fully funded training and additional FREE apprentice recruitment service from Walsall College. Contact our Business Training Solutions Team on or businesstrainingsolutions@walsallcollege.ac.uk Information correct at time of print (Jan 2017) Need to know more? Call or log on to 5
6 Why you should consider providing an Apprenticeship... If you are not already providing apprenticeships, here are four reasons why you should be: 1 Invest in managers of the future 2 Increase business growth 3Attract new talent 4 Boost the local economy 57% of companies report a significant proportion of apprentices go on to managerial roles within the organisation. 72% of businesses employing apprentices report improved productivity*, with 80% reporting a high increase in employee retention. *by a weekly average of 214. Talent that can be moulded to suit your organisation's working practices. 81% of consumers show preference for businesses that employ apprentices. Laura Myatt Studied Level 2 and Level 3 Apprenticeship in Engineering, at Perkins Engines Company Limited While her friends chose to study hairdressing and childcare after school, Laura was not afraid to stand out from the crowd and knew a career in engineering was her calling. She initially enrolled onto A-level courses but found that these didn t offer her the practical industry experience she desired, and soon after she was snapped up as an apprentice by Perkins Engines Company Limited who recognised her talents. I was keen to learn more hands-on skills and start earning a wage, so an apprenticeship seemed very appealing. It s definitely been a good career move as from day one I hit the ground running and felt really valued as an employee. After proving myself I was given the responsibility of running a project which involved the development and manufacture of a new gas engine. I ve since worked on many more high value international projects which have saved the company a lot of money. Having experienced first-hand how much an apprenticeship has helped me start my career, and the range of opportunities available in Engineering, I ve become an ambassador for the sector and regularly attend local and national events to help inspire more young females to consider apprenticeship careers in engineering. Mark Stones, Training & Apprentice Coordinator, Perkins Engines Stafford Limited, added, " Laura has and continues to be an asset to the business. Her drive and ambition to succeed is an inspiration to both her peers and work colleagues alike, while her problem solving skills and abilities have given business leaders the confidence to task her with leading high level projects." 6 Need to know more? Call or log on to
7 What to do next and what Walsall College can offer you FREE consultation service With its dedicated Apprenticeship team, Walsall College is ideally placed to provide you and your organisation with the expertise and support to not only guide you effortlessly through the new system, but also offer high quality accredited apprenticeship training so your employees are trained to the highest possible standard. We will work with you so that you: Understand fully the changes being made, along with the financial, legal and technical ramifications Are in a position to plan ahead, ready for the first implementation of the levy in April 2017 Are aware of all the apprenticeship programmes now available, including the newly classified ones in areas such as Accountancy, Law, Financial Services and Business Receive professional advice when you need it, throughout all stages of the process Can offer your apprentices the highest standard of training available Walsall College has been rated 'Outstanding' by Ofsted and is one of the largest FE apprenticeship training providers in the West Midlands. Our success in this field is second to none, which is reflected in a 95% satisfaction rating from the businesses we work with. Our FREE expert consultation service is designed to help businesses like yours get the most from the Apprenticeship Levy. Contact our Business Training Solutions Team on or businesstrainingsolutions@walsallcollege.ac.uk Need to know more? Call or log on to 7
8 Walsall College is uniquely and proudly vocational. Our greatest passion is unleashing the potential of individuals, communities and businesses; our greatest legacy is the talent of our students: skilled, professional and enterprising. Wisemore Campus Littleton Street West Walsall, WS2 8ES Tel: Fax: Deaf Academy Minicom (For Deaf users only): Green Lane Campus Long Acre Street Walsall, WS2 8HX Tel: Fax: Deaf Academy Minicom (For Deaf users only): The Hub Littleton Street West Walsall, WS2 8ES Tel: Fax: Deaf Academy Minicom (For Deaf users only): Winner 2010/11 Winner 2011/12 Winner 2013/14
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