From April 2017 the Government will be introducing a new levy on employers. The main aim of the apprenticeship levy is to support employers in growing the number and quality of apprenticeships in their own workforce. The levy process is still being developed and we will update you regularly –for detailed information click here for the current information sheet.

In summary:

  • All employers who have a pay bill of more than £3 million per year will be charged the levy at a rate of 0.5%  – the levy will be collected via HMRC through the PAYE process
  • All employers who have to pay the levy will be given a £15,000 per year levy allowance to spend on apprenticeships via a digital account. This can only be spent on costs of an apprenticeship training and assessment provided by an approved training provider and assessment organisation

Example – an employer with an annual pay bill of £5,000,000

  • Levy sum: 0.5% x £5,000,000 = £25,000
  • Subtracting levy allowance : £25,000 – £15,000 = £10,000 annual levy payment

» Use the indicative online tool for employers to estimate your levy contribution

My pay bill isn’t £3 million so surely it won’t affect me?

The way apprenticeships are paid for will change and you can have your say to shape funding contributions for employers who don’t pay the levy:

Employers who do not have to pay the levy (pay bill of less than £3 million per year) will be required to pay a contribution towards the cost of training and assessment (currently the Government are seeking views on proposals that Government pays 90% towards the cost of training and assessment and employers pay the remaining 10%).

» Learn more about this and feed in your views – Hurry – This closes 5th September!

There will be further information from the Government in October and HCPA will keep you updated of any developments in the meantime.  HCPA strongly recommend that you download and read the publication so that you can keep up to date with this new initiative.