What is the Apprenticeship Levy?

Key details

What the levy means for you

As you, the HR Director
The Levy gives you the chance to create your own workforce, tailored to your businesses’ needs.  You will have the opportunity to not just recruit new hires into the organisation through apprenticeship and graduate schemes but to also upskill your existing employees. 

As you, the Finance Director
You have the opportunity to turn this cost into a benefit.  The Levy does not just need to be a tax paid with no returns. Work closely with you HR and Learning & Development team to find out how you can neutralise the cost, or better, incorporate it into your people management strategy.
To overcome the key challenges ahead of you, start considering the following:

  • Calculate your Levy spend
  • Identify your skills requirements
  • How much of your current training spend can be mapped to an Apprenticeship Levy approved standard
  • Decide whether you have the internal resources to manage the Levy or do you need to consider outsourcing it out.

Overcoming challenges
To overcome the key challenges ahead of you, start considering the : 

  • Calculate your Levy spend
  • Identify your skills requirements
  • How much of your current training spend can be mapped to an Apprenticeship Levy approved standard
  • Decide whether you have the internal resources to manage the Levy or do you need to consider outsourcing it out

What the levy means for your business

All business that pay the levy will be able to access their contribution through an online digital apprenticeship service account and use it to pay for apprenticeship training by approved providers. The government will top up an employer’s fund by 10% and the employer has 18 months in which to use or lose the funding. Many SMEs will be unaffected as their pay bills fall below the threshold. A recent CIPD policy report suggests that a proportion of all apprenticeship levy funds should be allocated to Local Enterprise Partnerships/Business Growth Hubs to enable them to better support SMEs to invest in apprenticeships.

What can employers do to prepare?

  • The size of your organisation doesn’t matter – it’s the wage bill that counts, so organisations with a small workforce could still be affected if they carry a hefty wage bill due to employing highly skilled or specialised workers;
  • Estimate and plan in advance for the financial cost of any levy – it could be significant;
  • Review your organisational structure and resourcing to determine how your organisation might make best use of levy funds if it has to pay. The key requirements for an apprenticeship are:
    • the apprentice must be employed in a real job; they may be an existing employee or a new hire;
    • the apprentice must work towards achieving an approved apprenticeship standard or framework;
    • the training must last at least 12 months;
    • the apprentice must spend at least 20% of their time on off-the-job training.

For more details of the current proposals go to government guidance.
For advice and assistance contact the Solveway Team on 01438 340121 or email info@solveway.co.uk.

 

Further Information

FAQ's

> Click here to read our FAQ's about the Apprenticeship Levy (Adobe PDF Document)


You can read more about the Apprenticeship Levy on the Gov.uk website by clicking here.