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Apprenticeship Levy

The government continues to drive apprenticeships as a key vehicle to allow employers to upskill their workforce and provide a range of career opportunities to new entrants. Reforms to Apprenticeships continue to grow momentum and now all apprenticeships are to a range of standards developed by employers and industry. 

The Institute for Apprenticeships and Technical Education (IFATE) now oversees the implementation of apprenticeships and the continued drive to improve the quality of Apprenticeship standards. April 2017 saw the introduction of the Apprenticeships levy, which supports this initiative and forms a key part of wider initiatives to increase business participation in Apprenticeships. More information on IFATE and Apprenticeship Standards can be found here: Home / Institute for Apprenticeships and Technical Education

Businesses whose annual payroll costs exceed £3million will be required to contribute 0.5% of their payroll. Levy monies will help fund the recruitment of enthusiastic young people into the UK workforce as well as support the skills development of your existing employees.

Small businesses will continue to receive Apprenticeship funding via the set up of a Digital Apprenticeship Service (DAS) account. You may also be required to make a 5% contribution towards the cost of Apprenticeships. The Digital Apprenticeship Service (DAS) system will allow employers to reserve funds and pay for their apprenticeship training.

Myerscough College can help you minimise the risk and maximise the benefits of this levy.

Apprenticeship Standards

The guiding principles behind the reforms are:

  • Employer-led Apprenticeship standards that truly meet the needs of industry
  • A simpler system of funding administered by employers
  • Employer ownership of provider choice

The key benefits to employers of the reforms:

  • Apprenticeship content is business specific and tailored to business needs
  • Ownership of funding and buying power for training
  • Access to higher and degree level Apprenticeships

Myerscough College are continually involved in the design and implementation of Apprenticeship standards and the need to continually update and refine to ensure the latest industry standards are maintained. 

The Apprenticeship levy and Digital Apprenticeship Service (DAS) Accounts  
Key facts:

  • All employers are now required to set up a Digital Apprenticeship Service (DAS) account
  • Funding is access via this account for all employers, both 'levy' and 'non -levy'
  • The Apprenticeship levy came into effect in April 2017.
  • Employers whose payroll exceeds £3 million will pay 0.5% contribution via PAYE        
  • All employers will receive an allowance of £15,000 to offset against payment of the levy. This effectively means that the levy will only be payable on paybill in excess of £3 million per year.
  • The levy will be payable through Pay As You Earn (PAYE) and will be payable alongside income tax and National Insurance.
  • Each employer will receive one allowance to offset against their levy payment. There will be a connected person’s rule, similar the Employment Allowance connected person’s rule, so employers who operate multiple payrolls will only be able to claim one allowance.
  • The levy will apply to employers across all sectors.
  • Paybill will be calculated based on total employee earnings; it will not include other payments such as benefits in kind. It will apply to total employee earnings in respect of all employees.
  • Legislation to permit the imposition and collection of the apprenticeship levy will be introduced in the Finance Bill 2016.

All employers, irrespective of size now access funding via the set up of a Digital Apprenticeship Service (DAS) account. 

More information on these can be found here: Employing an apprentice: Overview - GOV.UK (www.gov.uk)

If you need any advice or guidance on the Apprenticeships Levy, Digital Apprenticeship Service (DAS) Accounts or anything else our dedicated Employer Services Team Can help. Contact them via 01995 642255 or email employerenquiries@myerscough.ac.uk

Levy Examples:

Employer of 250 employees, each with a gross salary of £20,000: Paybill: 250 x £20,000 = £5,000,000 Levy sum: 0.5% x £5,000,000 = £25,000 Allowance: £25,000 - £15,000 = £10,000 annual levy payment

Employer of 100 employees, each with a gross salary of £20,000 would pay: Paybill: 100 x £20,000 = £2,000,000 Levy sum: 0.5% x £2,000,000 = £10,000 Allowance: £10,000 - £15,000 = £0 annual levy payment

Further Information

To discuss any aspect of Apprenticeships, funding reforms or for general advice on training please contact Employer Services on 01995 642255 or email employerenquiries@myerscough.ac.uk