Apprenticeship Levy and non-levy paying employers

As you will no doubt be aware (you did read our May 2017 topical tip email, didn’t you?!) the Apprenticeship Levy was introduced on 6 April 2017 and employers with over £3m annual payroll are paying into their Digital Apprenticeship Account. Employers will then be able to access these funds to make payments for apprenticeship training, any money not spent will expire after 24 months.

However, what we didn’t cover, and what will be relevant for most of our smaller clients, is where they don’t pay the levy in the first place. The Government has at the same time introduced a “Co-Investment” scheme which, from May 2017, allows the cost of apprenticeship training to be shared 10% by the employer and 90% by the Government.

For levy-payers they can set up training with a provider and, having spent the levy paid over through the payroll, can then purchase further training paying the 10% through the Digital Account.

A non-levy paying employer can’t access a digital apprenticeship account until at least 2018. This will mean for the non-levy payer that they will have to pay direct to the training provider and the training provider will claim the 90% on their behalf. The 90% clawback will be conditional on the proof of payment of the 10%.

What all employers need to be aware of is that each apprenticeship is subject to funding band limits, for instance the cost of training an accounts assistant is limited to £9,000 whereas a dental technician is £18,000. So make sure that your training provider is within the limits otherwise the excess will have to be funded by the employer.

For levy paying employers, this new scheme is very much in mind, as payments are being made under the levy and therefore ways to spend this withheld money will want to be considered. For non-levy paying employers don’t forget the Co-Investment scheme is a valuable scheme.

High quality staff are hard to come by and expensive to recruit, so why not train your own?

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