Tackling the Apprenticeship Levy: A Comprehensive Guide for Employers
Understanding the Levy
The Apprenticeship Levy is a tax introduced in the UK in 2017 to fund apprenticeship training. Employers with an annual pay bill exceeding £3 million are required to pay 0.5% of their total pay bill into the levy.This levy is used to co-fund apprenticeships, with the government contributing 95% of the cost of training up to a maximum of £27,000 per apprentice.
Who Pays the Levy?
- Employers with an annual pay bill over £3 million.
- Public sector employers, such as local authorities, universities, and the NHS.
- Private sector employers, including businesses and charities.
How to Pay the Levy
Employers can pay the levy through the HMRC's online portal. Payments are due on the 6th of each month. Employers who fail to pay the levy on time may face financial penalties.Apprenticeship Levy Calculator
The government has developed an Apprenticeship Levy Calculator to help employers estimate their levy liability. Employers can use this calculator to input their total pay bill and determine their monthly levy payment.The Apprenticeship Levy Calculator can be found on the GOV.UK website.
Using Apprenticeship Levy Funds
Employers can access Apprenticeship Levy funds to cover the costs of training new apprentices. Funds can be used to pay for the following:- Apprenticeship training costs
- Assessor costs
- Materials and equipment
- Travel and subsistence costs
Non-Levy Paying Employers
Employers who do not pay the Apprenticeship Levy can still offer apprenticeships. These employers can access government funding through the following schemes:- Apprenticeship Service
- Incentive payments
- Co-investment grants
Benefits of Apprenticeship Training
Apprenticeship training offers a number of benefits for employers, including:
- Developing a skilled workforce
- Improving productivity
- Reducing staff turnover
- Boosting staff morale
According to a study by the National Apprenticeship Service, apprenticeship-trained employees are 10% more productive than non-apprenticeship-trained employees.
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