Apprenticeships Levy and Non-Levy
Apprenticeships are a way of combining training with work and have a long track record of bringing productivity benefit to employers. Swatpro too have a long track record of working with apprentices for hundreds of businesses across a large range of sectors, whilst maintaining a friendly and flexible approach which is essential when training apprentices.
May 2017 saw the introduction of the Apprenticeship Levy causing many large businesses to start thinking about apprenticeships for the first time. The levy requires all employers with an annual pay bill of more than £3 million to pay 0.5% into a “levy pot”. This money is then reserved purely for the training of apprentices within the business.
The “levy pot” remains invested for 24 months with the employer to train apprentices, and then this money is re-invested by HMRC and longer term this could benefit other employers to train their staff?
If you are considering how best to embed an apprenticeship culture within your business so that your “levy pot” remains with your company, then speaking with a Swatpro partner can be invaluable. You can recruit apprentices or offer apprenticeships as a way of upskilling your current staff. If you make this training investment, the government invests 10% over and above the “levy pot”.
Apprenticeships are suitable for people aged 16 and over, with no upper age limit and range from an intermediary level through to a master’s degree.
For those employers with an annual pay bill of less than £3 million the government funds 95% of the cost of the apprenticeship. This is a fantastic investment! The highest costing apprenticeships cost £27,000, which means the cost to the employer would be £1,350 but this is spread over a 60-month period. Which equates to £22.50 monthly for these apprenticeships. The lowest costing apprenticeships cost £2,500, with the cost to the employer of £125 spread over 24 months, equates to £5.21 a month. Don’t let the headline cost be a barrier to offering an apprenticeship programme which is right for the business. Click here for the Apprenticeship Funding Bands.
For employers who have 49 staff of less, then the government will fund 100% of each apprenticeship, if this training is for young people aged 16-18*; for people aged 19 and above the government will fund 95% of the training as mentioned above.
In addition, the government offers both Levy paying and non-Levy paying employers a £1,000 incentive per apprentice aged 16-18*provided they are retained on programme.
*Also applies to 19 -24-year old who have an education, health or care plan or who have been in the care of the local authority.