3 Minutes
4th July 2022
If you are an employer that pays into the Apprenticeship Levy, you'll want to make sure that you make the most of your levy funds to recruit apprentices. Employers can use their Apprenticeship Levy funds to provide apprenticeship training and many employers have started to take on more apprentices or have set up a new apprenticeship programmes. It's important to know how to make the most of your levy funds and how they should be used.
Employers with a pay bill of more than £3 million must pay the Apprenticeship Levy. The levy is 0.5% of the employer's annual pay bill, and it must be reported and paid for monthly through the Employee Payment Summary. Employers who are connected to any companies or charities for employment Allowance purposes and have a combined annual pay bill of over £3 million must also pay the Apprenticeship Levy.
All sectors are included, and there are also special rules for certain sectors, such as franchises and managed service companies. The Apprenticeship Levy allowance reduces the amount you have to pay each year by £15,000. The allowance can be divided between your PAYE schemes and connected companies and charities. Employers who pay the levy receive funds to spend on training and assessing apprentices. The government also adds an additional 10%. How funding works depends on which part of the UK you are in. An apprenticeship training agency can help employers to deliver training and assessment of apprentices.
Employers that pay the levy can access their funds through the online apprenticeship service. The amount of funding that you receive depends on the levy that you pay, the proportion of your pay bill paid to your workforce in England, and the 10% top-up that the government provides.
You can get help from the government in a couple of ways to help you make the most of your levy funds. The National Apprenticeship Service offers face-to-face and telephone support to give advice on investing your levy funds. You can also transfer up to 25% of your levy funds to other employers. You have 24 months to spend your levy funds. If you already have an apprenticeship scheme, paying the levy can help you to expand it and take on more apprentices. If you don't already have an apprenticeship scheme, it's the perfect time to set one up and start hiring apprentices.
One way for employers to make the most of their funds is to offer apprenticeships at a higher level. Many employers are choosing to provide apprenticeships starting at level 4 and above. Levels 2 and 3 are equivalent to GCSE and A level, while levels 4 to 7 offer an educational equivalent to a foundation degree and above. Choosing these higher-level apprenticeships allows you to add skills to your existing workforce. You can future-proof your business and ensure you're prepared to face any possible skills gaps that could arise in your industry.
Finding the right training provider when recruiting an apprentice is one of the most important things you need to do. You need an approved training provider to access your apprenticeship levy funds. You can find a training provider using the government website, which allows you to choose an apprenticeship training course, select a course that offers the right skills and level, and find a training provider to deliver the course. You can search by keyword, qualification, or category and look through hundreds of course options.
Employers paying the apprenticeship levy can give up to 25% of their funds to other employers. This means that if you want to make sure you use all of your funds but you won't be using them for your own business, you can help to support your industry or sector, your community, or supply chain. Making use of all of your funds, whether by directly supporting apprentices in your company or transferring your funds, helps to make sure more people and businesses can benefit from apprenticeships.
If you want to make the most of your levy funds to recruit apprentices, be proactive about making plans for your funds. Identify the areas where apprentices could help to support the growth of your business or sector, or how you can support other businesses in your community. Both the apprenticeship service and individual training providers can help you to get more from your Apprenticeship Levy funds. Get the support that you need to make the best decisions for your levy funds and ensure they don't go to waste.
On April 1st 2021, PM Training became Achieve Training – find out more here
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