Apprenticeship Levy FAQs - Your Questions Answered (Part 1)
First announced back in 2015, the Apprenticeship Levy aims to fund three million apprenticeships by 2020, but what is it and how will it work?
What is the Apprenticeship Levy?
Simply put, the Apprenticeship Levy is new legislation from the Government, first announced in 2015 and beginning in April 2017. The aim is to create three million new apprentices by 2020 by taking a levy from certain businesses which is placed into a national pot and can be used to help fund the costs of taking on new apprentices in the future.
Will the Apprenticeship Levy affect my business?
This depends purely on your payroll. If you’re annual payroll bill is over £3m, then yes. However if it is less, then you’re excluded from the levy and won’t be affected.
What are the costs?
Qualifying businesses will be charged 0.5% of their total PAYE bill. Smaller companies can claim a £15,000 apprenticeship allowance to offset this charge.
How do I calculate my costs?
Businesses can work out exactly how much they need to pay in three steps:
1) Work out exactly what you total wage bill is, including pensions and bonuses
2) Work out what 0.5% of your total wage bill is
3) Take away the £15,000 levy allowance
What’s left is the figure which must be paid into the Apprenticeship Levy.
Has the Government stopped funding apprenticeships?
No, the Government says they will still ‘co-fund’ apprentices by continuing to fund 90% of training costs if your business is either too small to be levied, or you’re spent all of your levy allowance but still want to train more apprentices.
When does the levy come into force?
The Apprenticeship Levy begins in April 2017, and the first payments for eligible businesses will be taken from May 2017.
How can I learn more?
To learn more about the Apprenticeship Levy, how it affects your business and what you can do to prepare, book yourself on to one of our IRIS Payroll Year End and Legislation Seminars which are running throughout February and March. You can also visit our dedicated Apprenticeship Levy FAQ page for more information.
The seminars are delivered via a webinar, where you will join the online training session remotely from the comfort of your home or office.
To learn more and to book your place, call today on 0843 357 1836. To check out the dates we’ve got scheduled throughout this month and March, simply click below to see a full list.