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Published 23 agosto 2016
Despite calls from employer representatives to delay the introduction of the apprenticeship levy, the government has now confirmed that it will be introduced on 6 April 2017. The government has issued further details on how the levy will work together with proposals for a new funding model. The government is inviting employers and training providers to have their say on the initial funding proposals, to try to ensure that it fully meets the needs of those involved in the apprenticeship programme.
The core principles of the levy are unchanged - you will need to pay the apprenticeship levy if you are an employer, in any sector, with a pay bill of more than £3 million each year. The levy will be charged at a rate of 0.5% of your annual pay bill. Once you have paid the levy through PAYE, a proportion of the levy, reflecting the number of your employees living in England, will enter your digital account. You will be able to use this fund (plus an uplift of 10%, provided by the government) for training and assessment of apprentices in England. As apprenticeships are a devolved policy, authorities in each of the UK nations will manage their own apprenticeship programmes.
The recent proposals outlined by the government:
All employers and training providers now have the chance to feedback on the proposals for apprenticeship funding by completing the survey by 5 September. Please click here for survey.
Final funding proposals will be confirmed in October 2016 and employer guidance will be published in December.
If you are a business to which the levy will apply, and you have not yet done so, we recommend you project the cost of the apprenticeship levy to your business and consider your options now. The levy can, of course, be paid as an additional "tax" but given that the levy is likely to be substantial many employers will want to balance the cost of the levy and exploit this opportunity to use the funds available in the most effective manner. The levy will be paid on a monthly basis and you will be given 18 months to spend the funds arising from the levy before you "lose" them.
It is worth considering the lead times involved in building a substantial apprenticeship program in terms of:
In considering your strategy to deal with the levy, our employment lawyers can support your business to understand the practical impact of the levy as well as advising on the legal implications of employing apprentices.
Our services include:
+44 (0) 161 934 3179
+44 (0)161 934 3025
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