A simple guide to everything you need to know about the apprenticeship levy.
We’ve helped hundreds of companies to navigate the apprenticeship levy and we can help you to do the same.
If you want to make effective use of the funds in your apprenticeship levy account, we will help you to come up with a plan that works for your business.
Or if you just want to speak to someone who can help you to navigate the system, we’re here to help. Drop us a line at hello@ldnapprenticeships.com
Why have an apprenticeship levy?
Apprenticeships in England have evolved significantly over the past 50 years and this is the latest update to the system. The new system is structured to encourage all businesses with a payroll over £3 million a year to invest in Apprenticeships.
How does it work?
If your business’ annual payroll is £3 million or more per annum, then from May 2017 you would have started contributing towards the Levy. You would have reported this automatically to HMRC through your monthly PAYE returns.
The amount you pay is calculated at 0.5% of your monthly payroll, but every company gets a £15,000 allowance. This means that if your business had an annual pay bill of £10,000,000 you would pay £35,000. This is calculated as follows:
(£10,000,000 x 0.005) – £15,000 = £35,000)
Group companies are only able to use one £15,000 allowance. So, if you are part of a group your allowance will need to be shared out, and this must be declared at the beginning of the tax year.
Spent all of the funds in your levy account?
Don’t worry.
If you’ve spent all of the funds in your levy account, the government will still fund 95% of any apprenticeship training costs. For example:
Levy account balance: £3,000
Apprenticeship Funding Cap: £6,000
Government Pays: £2,850 (95% of the £3,000 deficit)
You pay: £3,000 from your levy and £150 in cash.
Note that these amounts are all taken from your levy account in monthly instalments, so the monthly cash cost to you is only a fraction of the £150 in the above example.
Payroll under £3million per annum?
Small employers can still access apprenticeship funding.
Smaller employers, with a payroll of less than £3million per annum, can still access funding to train Apprentices on their teams. Get in touch with us to find out more.
Need more information?
We realise that the Apprenticeship levy, and apprenticeship funding in general is a bit of a minefield, especially if you’ve never had to deal with it before!
Get in touch with us if you have any questions.