What does the Apprenticeship Levy mean for employers?

At Geason Training we appreciate the Apprenticeship Levy is your money.  We set out to ensure you are in control and focus on our key aim, to become an extension to your business.  We can demonstrate our advanced levy management programme ensures you have total control over our activity within your business, ensuring the initial planning, regular updates and the professional development of your staff is forefront to the operation.  Our levy management programme includes:

  • Full planning and administration of development programme
  • Regular progress updates using Microsoft Project 
  • Full levy financial management control and updates
  • Dedicated account manager
  • Absolute focus on your people planning
  • Full implementation of development planning tools and administration (if required)  
  • Management of up skilling and / or new recruitment of people
  • Development from Level 1 to Level 6 degrees are available 

The Apprenticeship Levy

The Apprenticeship Levy was set up by the Government with the aim of funding three million apprenticeships in the UK by 2020. It affects all UK employers with a payroll bill in excess of £3m. Small and medium sized enterprises under this payroll bill threshold and who are non levy paying employers will continue to be funded through provider allocations for the next few years.  For Trailblazer apprenticeships this will be done using the interim funding model.

Will this have an affect on the CITB levy?

Yes, if you are a levy paying customer there will be an increase to how much you can claim.  Geason Training can ensure your financial management of the levy will maximise all opportunities that are available via the CITB grant system.

If your PAYE is under £3m per annum and you don't contribute to the apprenticeship levy you will not see any changes to the CITB grant opportunities.

When will the levy be introduced?

The levy is due to start in May 2017.

What counts as your payroll bill?

Your payroll bill will be based on the total amount of earnings subject to Class 1 secondary NICs. The earnings include any remuneration coming from employment, such as wages, bonuses, commissions, and pension contributions that you pay NICs on however this excludes benefits in kind. 

How much will the levy be?

It will be set at a rate of 0.5% of the total payroll and will be collected monthly via PAYE.  There will be a £15,000 fixed annual allowance for employers to offset against their levy payments. The levy allowance will operate on a monthly basis and will accumulate throughout the year. This means as an employer you will have an allowance of £1,250 a month. Any unused allowance will be carried from one month to the next.  Where a group of employers are connected you will only be able to use one £15,000 allowance. 

What can the levy funds be spent on?

Levy funds can only be used as a contribution towards the cost of apprenticeship training and end-point assessment with an approved training provider such as Geason Training. It cannot be counted towards an apprentice’s wages or wider training programme. Further details of what can be included as contributions will be set out in October 2016 and finalised by the end of the year. 

How can employers spend their levy?

On collection by HMRC, levy funds will be held in an employer ‘Digital Apprenticeship Service’ (DAS) account. Registration to create the DAS account is available from January 2017 and will only be used to fund apprenticeships delivered in England.  When the account is set up, employers will be able to direct the funds to pay for their apprenticeship training held in the DAS accounts to ‘approved training providers’ such as Geason Training. Levy funds will expire 18 months after they have entered the DAS account.

How do I make payments to my training provider?

On agreement of your apprenticeship training with a provider such as Geason Training, payments will be deducted monthly from your DAS account. This allows you to spread the cost over the duration of the apprenticeship.  Geason Training can manage this entire process for you.

What should I do with my current apprenticeships?

Apprentices started before May 2017 will be funded through the programme they started on.  You do not need to worry about transferring existing apprentices onto your levy framework.

Can I make use of the Trailblazers Apprenticeship Fund?

The CITB has launched a Trailblazer Apprenticeship fund as a transitional measure to support employers who are taking the lead on investing in higher level Trailblazer Apprenticeships now before the Apprenticeship Levy is launched. The CITB does not provide financial support to higher level Trailblazers (Levels 4-7) at the moment, however, from May 2016, eligible employers embarking on higher level Trailblazers will be able to apply for funding from the CITB. These funding applications can be backdated to September 2015 by the CITB, in line with the academic year.

For the GOV.UK employers' guide to apprenticeships click here

For more information on Trailblazers and funding, speak to a member of our Training Development Team on 0330 088 9596 or refer to the CITB website here.

For further information on the apprenticeship levy or on setting up an apprenticeship development programme please contact Geason Training's development team on 0330 088 9596 or enter your details here.