Not sure if the apprenticeship levy will affect you?
Aside from being a great way to boost the amount of apprenticeships on offer, it can also help to fund essential training and development that will make apprentices more effective. But what does the apprenticeship levy mean for your business?
To help you understand what it’s all about, here’s everything you need to know about the apprenticeship levy:
What is the apprenticeship levy?
The apprenticeship levy is a government organised plan that was introduced to increase the number of apprenticeships on offer in the UK – served in the form of a tax.
With this new tax, businesses will be able to better fund the recruitment, training, and development of apprentices.
The levy aims to fund three million new apprenticeships in England by 2020.
Who has to pay the apprenticeship levy?
If you’re an employer with a pay bill of over £3 million yearly, you’ll pay the apprenticeship levy.
When did the apprenticeship levy come into effect?
The apprenticeship levy was introduced on 6 April 2017.
How much does the apprenticeship levy cost?
The apprenticeship levy is calculated at a 0.5% rate of your annual pay bill.
However, employers also get a £15,000 fixed annual allowance to deduct from their yearly levy payment.
And, once you’ve started paying, you’ll be able to access your funds via the Digital Apprenticeship Service (DAS). You can then use the money to choose and purchase apprenticeship training and to find and manage your apprentices.
Your funds will expire if you don’t use them within 24 months of them entering the account.
How can I draw money from the apprenticeship levy fund?
To draw money from the levy fund, you’ll need to register your own information, plus the details of your apprentices.
Then, you’ll be given a voucher that’s eligible for use with registered providers from the end of May 2017.
How will my payments be made?
HM Revenue and Customs (HMRC) will take your payments on a monthly basis.
You’ll need to make apprenticeship levy payments using the PAYE process (in the same way tax and National Insurance is paid), and businesses are required to calculate and report what they owe each month.
If you overpay at any point during the year, HMRC will refund you in PAYE credit.
What happens if my business doesn’t have to pay the levy?
As the levy only affect business with paybills in excess of £3 million, less than 2% of UK businesses will need to pay it.
However, if you’re a non-levy paying employer, you’ll still receive support from the government when it comes to hiring and training apprentices.
All you have to do is agree a payment plan with a training provider, pay 10% of the costs, and ensure your chosen provider can provide proof of payment – and the government will pay the remaining 90%.
And, if you’re a business with less than 50 employees – you’ll also receive a £1000 incentive towards apprenticeships for 16-18 year olds.
To find out more about the apprenticeship levy, visit gov.uk
What is the apprenticeship levy? by reed.co.uk