Ahead of the introduction of the apprenticeship levy in 2017, it was announced recently that charities will not be exempt from the levy, and any money raised but not spent could be redirected to private businesses.
The Charity Finance Group (CFG) held a meeting with Skills Minister, Nick Boles, to discuss how the apprenticeship levy would work for their sector. The levy, to commence from 1st April 2017, will require all businesses with wage bills over £3million to pay a levy of 0.5% of their overall payroll to the government. This money will then be used for the training of apprentices, not for elements including recruitment or paying their salaries. A payment of £15,000 will be made to the employer to offset the cost of implementing the levy, and the difference between this what they pay out for the 0.5% will be put into their own digital account.
Nick Boles confirmed in the meeting that charities would not be granted any special considerations regarding the levy, and that any money they raise in their digital account but do not spend on the training of apprentices could be passed on to other organisations; the same for all businesses who are subject to the levy payments.
The concern from the CFG is that charities may raise money from the levy, but these funds are not necessarily needed for the training of the apprentices, and instead would be better used towards the cost of employing apprentices, such as their wages, development and recruitment. As they cannot use the funds for this purpose, they will lose their money to the private sector. Charities will have over a year to use their funds, but the details of how much time they will receive have not been confirmed.
In light of this meeting with Nick Boles, the CFG is lobbying for the Institute of Apprenticeships board to include a charity representative.
Further details on the apprenticeship levy are due to be announced by the end of this month. To find out more about how your business can be involved in the training and development of apprentices in your business, contact the Aspire Training Team on 01202 551553 or email email@example.com.