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Practical advice to employers ahead of the Apprenticeship Levy

FDR Law is helping businesses across the North West prepare for the impending Apprenticeship Levy which is coming into force on 1st April.  The new levy affects all companies with a wage bill of over £3 million who will be subject to the 0.5 per cent levy and the law firm is calling for employers to make sure they are prepared for the forthcoming changes.

Stephen Poyner, employment lawyer at FDR Law, explains; “From April 2017 the way the government funds apprenticeships is changing through the introduction of a monthly levy. This is being introduced to help fund, and encourage employers to take on, high quality apprenticeships which the government sees as crucial for raising UK productivity and staying globally competitive. 

Depending on the size of their employee pay bill, all employers operating in the UK may be affected. With these levy arrangements also comes a new system for all employers, to access apprenticeships, not just those caught by the levy”

With so much confusion surrounding the changes, FDR Law has addressed the top questions employers have about the Apprenticeship Levy to ensure local businesses are delivering on their obligations:

  1. What will I have to pay? Employers with over a £3 million wage bill will pay 0.5 percent of their total wage bill in the apprenticeship levy. Government will collect this payment through the HMRC and the PAYE process. All employers will receive a £15,000 levy allowance; this will be deducted from your total payment.
  2. What kind of training is available? The apprenticeship levy puts employers firmly in the driving seat to select the appropriate services you require. There are two types of training – either apprenticeship frameworks or apprenticeship Trailblazer standards – to choose from, and both will be fundable through the levy. You will select the training provider and the assessment organisation and will agree the price you are willing to pay for the training and assessment ideally within the funding band limit set by the Government to avoid additional costs
  3. Can anyone undertake an apprenticeship? Apprentices are no longer funded by age band and any person of any age can complete an apprenticeship as long as this is new and justifiable training and qualifications for their job role. Apprentices don’t have to be new entrants. They can be existing employees who undertake apprenticeship training for CPD purposes or to progress within your organisation. New job role specific qualifications allow you to undertake a flexible blend of traditional and professional qualifications specific to the job role you require.
  4. How do I access the funds? You will be able to access your funds to pay for apprenticeship training using the digital apprenticeship service. This will allow you to select the appropriate training, training provider and pay for this training. The government will top up the amount you have to spend on a monthly basis by 10 percent. You will agree a price and a suitable payment schedule with your training provider and funds will be sent to your account by the government on a monthly basis. These will expire 24 months after they reach your account. After the first year of the apprenticeship levy you will be able to transfer 10 percent of your apprenticeship levy to other employers in your supply chain to help them pay for apprenticeship training.
  5. My wage bill is less than £3 million – does that mean I miss out? No. While you won’t pay the levy, you can still access funding. The Government will pay a 90 percent contribution to the cost of any apprenticeship programme you wish an employee to undertake if you are able to contribute 10 percent of the total cost. This will be across the lifetime of the apprenticeship, does not have to be paid up front and can be negotiated with the provider you choose.

If you’re a business needing further advice on the new legislation, please contact Stephen Poyner at FDR Law on 01925 230000 or email stephen.poyner@fdrlaw.co.uk