Do you know if you will have to pay the Apprenticeship Levy and how it will impact your business? Only 1.3% of UK employers will need to pay the Apprenticeship Levy. There will be alternative arrangements for those employers who won’t pay the Levy.

All UK employers who have a total employee pay bill above £3m a year will pay the Levy. This includes public and private sector, charities and educational providers such as academy groups and universities. The Levy rate is set at 0.5% of any pay bill over £3M per annum.

Payments will be collected monthly by HM Revenue and Customs (HMRC) through Pay as You Earn (PAYE), alongside tax and National Insurance.

Employers get a £15,000 fixed annual allowance to offset against the Levy payment. Please use the following link for more information on the direct gov website.

www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work

Here are some examples of how much employers may pay in Levy:

Example 1:

Employer of 250 employees, each with a gross salary of £20,000

Annual pay bill: 250 x £20,000 = £5,000,000
Levy applied: 0.5% x £5,000,000 = £25,000
After allowance applied: £25,000-£15,000 means £10,000 Levy payment

Example 2:

Employer of 100 employees, each with a gross salary of £20,000

Annual pay bill: 100 x £20,000 = £2,000,000
Levy applied: 0.5% x £2,000,000 = £10,000
After allowance applied: £10,000-£15,000 means £0 Levy payment

One of the benefits of the scheme is that it places control of Apprenticeship funding into the hands of the employer. This allows you to invest in Apprenticeship training for new and existing staff to help secure the future of your business.

If your business has an annual pay bill less than £3m it will not have to pay the Levy, however you will still be able to access funding for Apprenticeships.

Co-funded Apprenticeship Training

If you don’t pay the Levy and have over 50 employees, Apprenticeship training will be co-funded. The Government will pay 90% of the negotiated cost of Apprenticeship training and the employer will pay the remaining 10%.

Fully-Funded Apprenticeship Training – Small Company Waiver

If you employ less than 50 staff and you train 16-18 year old Apprentices they will be fully funded.

NB If Apprentices are aged 19+ the co-funded rate applies and you will pay 10% of the negotiated cost.

Yes – a staff member in an existing job role, where the individual needs significant new knowledge and skills, may undertake an approved Apprenticeship programme.

Funds can only be used towards the costs of Apprenticeship training. They cannot be used on other associated costs such as Apprentice wages, travel and subsidiary costs or the costs of setting up an Apprenticeship programme.

The money collected by HMRC will sit in your digital account which you will be able to use to pay for Apprenticeship training.

For further information, please see the following link via the direct gov website: –

www.gov.uk/guidance/pay-Apprenticeship-Levy

Levy paying employers will be able to set up their Digital Accounts on the Digital Apprenticeship Service (DAS), choose the type of Apprenticeship they want to run, the number of Apprenticeships they take on, all of which can be delivered through Stoke on Trent College. Once the account is set up Levy payers will access this to make payments to the College.

For Levy and non-Levy payers, please contact our Business Services Team to discuss costs.

Stoke on Trent College is an approved provider on the Register of Approved Training Providers (RoATP).

This means we have been through an application process with the ESFA that considers due diligence, capability, quality and financial health to assess our capability to deliver high-quality Apprenticeship training.

An employer will receive a payment of £1000 towards the additional cost associated with Apprenticeship training if, at the start of the Apprenticeship, the Apprentice is:

Aged between 16 and 18 years old (or 15 years of age if the Apprentice’s 16th birthday is between the last Friday of June and 31 August)
Aged between 19 and 24 years old and has either an education, health and care plan provided by the local authority, or has been in the care of the local authority

The Government will automatically add 10% to the funds in your Apprenticeship service account. They will apply this 10% top-up monthly, at the same time the funds enter your account.

Funds that you don’t use will expire 24 months after they enter your account. Whenever a payment for training is taken from your account, the service always uses the funds that entered your account first. Your Apprenticeship service account will let you know when funds are due to expire.

The Government will automatically add 10% to the funds in your Apprenticeship service account. They will apply this 10% top-up monthly, at the same time the funds enter your account.

Funds that you don’t use will expire 24 months after they enter your account. Whenever a payment for training is taken from your account, the service always uses the funds that entered your account first. Your Apprenticeship service account will let you know when funds are due to expire.

You will need to pay more once your business has spent all your Levy contribution and top-up and you want to spend more on Apprenticeship training.

Stoke on Trent College is perfectly positioned to help you prepare and understand how the new Apprenticeship Levy will affect funding for new or existing staff.

Simply call our Business Services Team on 01782 603603 or email us at business@stokecoll.ac.uk

Further information on the support available can be found in the Government’s funding updates or by contacting our Business Services Team who can take you through what the changes mean for you and how Stoke on Trent College can help you to make the most of the opportunities it provides.

Tel: 01782 603603

Email: business@stokecoll.ac.uk

Stoke on Trent College, Stoke Road, Shelton, Stoke on Trent ST4 2DG and Moorland Road, Burslem, Stoke on Trent, ST6 1JJ