Taking on new talent as part of an apprenticeship scheme is one of the best ways to not only grow your business but also contribute to the growth of our collective talent pool and economy, and apprenticeships can also be used as a great way to upskill existing staff members.
Apprenticeships are a win-win situation for everyone, and their continued funding through the apprenticeship levy is a benefit to all.
Here we answer the most frequently asked questions about how the apprenticeship levy works.
What is the apprenticeship levy?
The apprenticeship levy is a tax paid to the government to fund apprenticeship schemes.
These finances are then stored in a fund that can be accessed by employers to pay for apprenticeship training, as well as assessment costs.
Who pays into the apprenticeship levy?
Companies with an annual staff wage statement of over £3 million are required to pay apprenticeship levy.
The payment is simple and made every month through PAYE.
The amount you pay is calculated at a rate of 0.5% of your wage total, and you will benefit from an annual government allowance of £15,000.
What is an apprenticeship levy transfer and how does it work?
Levy-paying companies have the option to transfer part of their apprenticeship levy to a non-levy-paying business through an apprenticeship levy transfer.
Employers can transfer up to 25% of their monthly levy to a non-levy-paying enterprise, which for example, could be a smaller company in your supply chain.
This will allow them to cover the cost of any apprenticeship training, while you as the levy-paying enterprise get to make full use of the pool of apprenticeship funds that may otherwise remain unused.
In fact, if unused levy funds expire after two years.
If you wish to transfer part of your levy to another company, all you have to do is start a levy transfer pledge, specify the amount of funds you are making available for the financial year, and choose one of the following options:
- Pledge your levy funds so that other businesses can apply for funding
- Make a direct transfer to a business you know
What happens next?
After you’ve created your pledge, it will become visible on a public website, although you can choose to keep the name of your organisation anonymous.
You’ll be able to keep track of all applications you receive, contact applicants directly, and approve or reject applications easily through the online portal.
In the case of a direct transfer, you just have to wait for the company to accept your connection first, then agree to the training details and costs. It’s as simple as that!