Five things you need to know about the apprenticeship levy

Who pays into the apprenticeship levy?

If you’re an employer who pays over £3 million in wages each year you need to pay 0.5% of your total pay bill into the apprenticeship levy set up by the government.

Does the government also pay into the levy?

No. This is an employer-funded initiative and that’s why employers are able to determine how they spend their funds. Unspent funds will be surrendered to the government after 24 months and those funds are distributed to non-levy paying employers as part of the 95% co-investment.

If my company isn’t eligible to pay into the levy, can I still access the funds?

Even if you don’t pay into the levy because your pay bill is below £3 million, you can still receive support with your apprenticeship training. The government will pay 95% of the costs, leaving only 5% left for you to pay. You can also partner with a larger levy-paying company that can donate unspent funds to you to use. They can donate up to 14% of their full levy pot.

What can the apprenticeship levy be used for?

Your funding can only be spent on the cost of training apprentices. It cannot be used to pay apprentices’ wages or any associated travel or set up costs for the training.  

As long as the apprenticeship training is delivered by an approved apprenticeship training provider, employers are free to identify the skills that are needed within their organisation and can choose the standards that employees need to meet in order to do their job effectively.

What if my levy funds don’t cover the total cost of the apprenticeship training I’ve chosen?

Payments for your chosen apprenticeship training will be taken on a monthly basis from your Digital Apprenticeship Service account and sent to your provider.

If you don’t have enough funds in your account to pay for training in a particular month, the government will ask you to share the remaining cost of training and assessing your apprentices for that month. The government will pay 95% of the shortfall, and you will pay the remaining 5%.

Bonus fact: Using the levy to invest in current employees to broaden your talent pool is just as valid as taking on a new apprentice to fulfil a specific role.

Ivy House has partnered with The Opportunity Group, a registered apprenticeship training provider and talent consultancy, to create a programme that not only delivers life-changing development to your emerging talent and future leaders, but is also aligned with the apprenticeship standard.

If you want to chat about using your levy funding to transform your emerging talent, get in touch today.

By Ivy House
21st January 2020

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