Here's the Apprenticeship Levy, explained â if youâre thinking of taking on an apprentice, find out if your business will need to pay. Skills Training UK’s Apprenticeship Consultancy Service can help you to effectively manage your funds, ensuring you receive maximum return on investment. This means that only employers with an annual pay bill of more than £3 million will pay the levy. It takes place between the Independent Apprenticeship Assessor and the apprentice. What happens if you are in a group of companies? At the end of the tax year, you’ll also need to: You’ll need to pay the Apprenticeship Levy each month in the same way you pay Income Tax or National Insurance contributions. Help and advice is always available from our Apprenticeship â¦ So, contact us today firstname.lastname@example.org to make sure you don’t miss out. If you are an SME with less than 50 employees, then the government meets the full cost for Apprentices aged 18 and under. What can Apprenticeship Levy funds pay for? For non-levy businesses with less than 50 employees there will also be a new £1000 incentive towards apprenticeships for taking on someone aged 16 to18. This means you have an allowance of £1,250 a month. For other maintained schools, the local authority is the employer. The money is paid in two stages – at three and 12 months. Your Apprenticeship Levy allowance of £15,000 can be allocated between: You can decide how to split the allowance between your PAYE schemes or with your connected companies or charities. Degree Apprenticeships are fully funded by the Apprenticeship Levy through your employer. Apprenticeship Levy is charged at 0.5% of your annual pay bill. Franchises with an annual pay bill of over £3 million (including any connected companies or charities) will have to pay the levy. Public bodies each get a full Apprenticeship Levy allowance as they are not considered to be connected companies. Report your Apprenticeship Levy each month using your employer payment summary (EPS) and include the amount of the: You do not need to report Apprenticeship Levy on your EPS if you have not had to pay it in the current tax year. This means you have an allowance of £1,250 a month. If achieved, this will be a 35% increase compared to the previous five years. University of Roehampton. Learn more about the benefits of an apprenticeship. The levy will be charged at a rate of 0.5% of an employerâs paybill. You’ll have a full £15,000 allowance if the special purpose vehicle has been set up part way through the tax year. Apprenticeship Levy payments are a deductible expense for Corporation Tax. The government will pay 95% of the additional costs (up to the maximum of the relevant funding band) - with you as the employer ‘co-investing’ 5%. Setting up How to choose the right apprenticeship training. Any unused allowance can be carried forward into the next month within the same tax year. What happens if an employer’s levy funds don’t cover the full cost of training? The upper limit of the funding band also caps the maximum price that the government will ‘co-invest’ if an employer does not pay the Apprenticeship Levy or has insufficient funds to pay for the number of Apprenticeships they want to use. Short lived companies such as special purpose vehicles will have to pay the levy if they’re liable for Class 1 secondary National Insurance contributions. Subtract this figure from 0.5% of your monthly pay bill. What Are the Benefits of Apprenticeships for Employers? An apprenticeship is a modern, hands-on way to train for an exciting new career. This represents a rare opportunity to reshape the role Apprenticeships play in delivering skills to the UK economy. QA specialises in digital and tech and IT apprenticeships in the UK. In the current (2018/19) tax year it is payable by all employers with an annual pay bill of more than £3 million at a rate of 0.5% of their total pay bill. Apprenticeships. Divide your full annual allowance by 12 and multiply by the number of months since the start of the tax year. How do employers get back more than they put it? Therefore, you must decide what proportion of the levy allowance each employer in the group will be entitled to. Apprenticeship Levy 2017 Q + A 1) What is the Apprenticeship Levy? As an additional incentive during the COVID-19 pandemic, employers are given £2,000 for each new apprentice aged 16-24 who starts their contract of employment between 1 August 2020 and 31 January 2021, or £1,500 for each new apprentice aged 25+. Training Companies – Helping Employers and Individuals, Apprenticeship Training Providers in London. Each governing body will be entitled to an allowance of £15,000. Levy funds donât last forever â donât lose out. email@example.com It will take only 2 minutes to fill in. There are hundreds of apprenticeships to choose from. The Apprenticeship Levy is a new tax that will take effect in April 2017. Levy funds will expire 24 months after they enter your digital account unless you spend them on Apprenticeship training. For voluntary-aided schools, foundation schools, free schools and academies, the governing body is the employer. Employer contact form only. The levy allowance operates on a monthly basis and accumulates over the year. The levy, which was introduced by sections 98 to 121 of the Finance Act 2016, will require Yes. The Apprenticeship Levy applies to both public and private UK employers across all sectors with an annual payroll of more than £3m. You cannot carry over any unused allowance into the next tax year. QA invested in the R&D of a â¦ Through that, youâll be able to: See how much youâll pay in the levy. Alternatively, please call Skills Training UK’s dedicated employer helpline on 0800 612 6224 or email firstname.lastname@example.org. In the budget of July 2015, the Chancellor announced that the government would introduce an Apprentice Levy for large employers to fund the Apprenticeship programme in the UK. This is also available for Apprentices aged 19-24 with additional learning needs or who come from a disadvantaged background. If an employer pays the Apprenticeship Levy but their funds don’t cover the full cost of the Apprenticeship training they would like to buy, then additional support is available. Levy funds can pay for Apprenticeship training and assessment. We use this information to make the website work as well as possible and improve government services. Any unused allowance is carried over from one month to the next. QA: Your organisation's partner for tech and business apprenticeships www.gov.uk/guidance/manage-apprenticeship-funds. Q&A. You can change your cookie settings at any time. This page answers some of the more common questions about the Apprenticeship Levy. This is known as ‘co-investment’. In England, control of apprenticeship funding will be put in the hands of employers through the Digital Apprenticeship Service. Payments are spread across the entire lifetime of the Apprenticeship – taken each month by your training provider. QA Education Magazine, essential guide to purchasing services and products for head teachers and decision makers in schools, academies, and education establishments across the UK There is an apprenticeship levy calculator of sorts, you can make a funding estimate using this link. You just need enough funds in your account to meet the monthly payments. Our aim is to deliver high-level technical, leadership and business skills which transition perfectly into the workplace. If you start or stop being an employer part way through the tax year you can use your full annual Apprenticeship Levy allowance against the amount of the levy that you owe. I agree to www.skillstraininguk.com collecting and storing personal data as outlined in our. SMEs are still subject to the same Apprenticeship funding bands as levy paying employers. Why should employers embrace Traineeships? They cannot pay for Apprentices’ wages, travel or subsidiary costs, managerial costs, work placements, traineeships or the costs of setting up an Apprenticeship programme. The Apprenticeship Levy was initiated by the UK government in April 2017, for all employers paying a wage bill of more than £3 million per year. Connected companies or charities will only have one £15,000 allowance to share between them. Can employers transfer their levy to other employers? How do non-levy paying employers pay for Apprenticeships training? If you wold like to know how Skills Training UK can help your SME manage its Apprenticeships funds, please click here. your annual pay bill (including any connected companies or charities) in the previous tax year was more than £3 million, you think your annual pay bill (including any connected companies or charities) for the tax year will be more than £3 million, if your annual pay bill (including any connected companies or charities) unexpectedly increases to more than £3 million - start reporting when this happens, annual Apprenticeship Levy allowance you’ve allocated to that, Apprenticeship Levy you owe to date in the current tax year, check your estimated pay bill against the actual figures for the tax year, you supply labour (including subcontractors) to a client, you pay Class 1 secondary National Insurance contributions on the earnings of those workers, your pay bill exceeds £3 million (including any connected companies or charities). We’ll send you a link to a feedback form. Employer with a levy pot of £35,000 takes on five apprentices, Total spend by employer = £35,500 (£35,000 + £500), Total contribution from government = £9,500. You’ve accepted all cookies. Download our Apprenticeship guides for Levy paying employers and non-Levy paying employers here. The apprenticeship levy is a UK tax on employers used to fund apprenticeship training, announced in the July 2015 budget, applicable to all employers with a payroll exceeding £3 million. Additional information added to explain how to apply the Apprenticeship Levy in specific sectors. To help us improve GOV.UK, we’d like to know more about your visit today. You can use HMRC’s Basic PAYE Tools to help you work out how much you need to pay. If you’ve overpaid Apprenticeship Levy during the year, you’ll receive a refund as a PAYE credit. FindApprenticeships.co.uk is the UK's leading website to find an apprenticeship job. Apprenticeships have changed, with new funding arrangements and the introduction of the Apprenticeship Levy. Skills Training UK can help you to manage this process – making clear the full cost of your Apprenticeship, the amount of funds that are available and how much you have to spend every month. If you are an employer with multiple PAYE schemes and you do not use your full Apprenticeship Levy allowance during the year, you can change the allocation at the end of the tax year, to offset any unused allowance against another of your schemes. The allowance reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year. The Apprenticeship Levy is a UK tax on employers which can be used to fund apprenticeship training. Instead, you pay just 5% toward the cost of the Apprenticeship and the government will pay the remaining 95%. Employers that meet this criterion are now required to pay 0.5% of their payroll each month as a levy tax. Each Apprenticeship has been placed into one of 15 funding bands ranging from £1,500 to £27,000. Employers that pay the levy in England receive a 10% top-up from government. As a result, the joint venture would not be connected to any other companies. You must keep records of any information you have used to calculate your levy payment for at least 3 years after the tax year which they relate to. The employer for faith schools will be the local authority if the school is voluntary-controlled, otherwise it will be the governing body. Report any changes to the Apprenticeship Levy as a result of changes to your pay bill on your next EPS. The section about 'how to allocate your allowance' has been updated. Are there extra incentives for employees with less than 50 members of staff? Annette Allmark, Director of Strategic Policy at People 1 st, explains why retailers should not fear the Apprenticeship Levy, but embrace it.. If you find errors in your total annual pay bill at the end of the tax year, you must submit an extra EPS with the correct Apprenticeship Levy for the full tax year and pay what you owe. The 2 companies and the joint venture would therefore each be entitled to their own levy allowance of £15,000. The levy allowance operates on a monthly basis and accumulates over the year. An apprenticeship is the recognised way people are trained in a craft trade or profession. You’ll still need to pay Apprenticeship Levy even if you already contribute to an industry-wide training levy arrangement, for example the Construction Industry Training Board Levy. NHS trusts and other health service bodies (such as Scottish Health Boards, Welsh Local Health Boards and Health and Social Care Trusts in Northern Ireland) are considered to be companies and therefore have to follow the connected companies rules. 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