The Apprenticeship Levy
If you’re an employer with a pay bill over £3 million a year, you must pay the apprenticeship levy from 6 April 2017. You will report and pay your levy to HMRC through the PAYE process. Less than 2% of UK employers pay the levy.
Levy funds will create opportunities for young people across the country, delivering the skills British businesses need. The levy will give employers control of their training, agree a total price for each apprenticeship, which includes the costs of training and assessment. In England, the government will top up employers’ levy with an extra 10%, paid directly to employers’ apprenticeship accounts. An employer’s pay bill is made up of the total amount of the employees’ earnings that are subject to Class 1 National Insurance contributions, such as:
Employers with a pay bill of less than £3 million a year will not need to pay the levy. At least 95% of non-levy-paying employers’ apprenticeship training and assessment costs in England will be paid for by the government. The government will ask these employers to make a 5% cash contribution to the cost, paid directly to the provider, and the government covers the rest (up to the maximum agreed funding band).
Through the apprenticeship service on GOV.UK employers can plan and manage their apprenticeship programme, giving them greater control over their apprenticeships and account funds.
The apprenticeship service is made up of the following: