Last week saw the launch of new employer guidance from the Department for Business Innovation and Skills on how the apprenticeship levy will work. The levy, due to be implemented on 6th April 2017, will require all employers who pay a wage bill of over £3million per year to invest 0.5% of that total wage bill into the training of apprentices.
The guidance goes into more payment details, including what counts as a business’s pay bill, calculating what an employer will have to pay, examples of payment and how to pay the levy. Accessing the Digital Apprenticeship Service which stores the funds is also explained, including how to access the funds, creating an account, when the funds will appear and when they expire. The apprenticeship levy will only apply to a small number of employers who have the required wage bill, so the guidance also goes into more details about the remaining employers in the UK, as well as the arrangements for those apprentices who began their training before 6th April 2017.
The guidance explains the timeline leading up to the launch, with details of future announcements due in June, October and December 2016. In June we can expect details on provisional funding bands on how much can be spent on each apprentice, the provisional level of support that can be expected for those employers not subject to paying the levy, provisional details on support employers receive for hiring 16-18 year old apprentices and English and Maths training, as well as eligibility standards that show where you can spend the funding. In October these provisional details will be confirmed and in December there will be further employer guidance from HM Revenue and Customs (HMRC) on how to calculate and pay the levy.
Employers should be aware of the new changes and foundations that will shape apprenticeships from next year as not only is the funding of apprenticeships changing throughout the next three to four years, but also the frameworks and standards that govern those apprenticeships. A number of steering groups, as well as the Institute for Apprenticeships, have been designed to tailor apprenticeships specifically for industries, by the employers themselves.
To read the full guidance published you can visit the government website here. Aspire Training Team works with employers across the South on placing high quality apprentices into business administration, childcare and health & social care positions. If you’re an employer considering hiring an apprentice and have questions on the levy or how the funding will work, you can contact the team on 01202 551553 or email email@example.com.