What is the Apprenticeship Levy?
If you are an employer with a wage bill of over £3 million a year, you will be aware of the Apprenticeship Levy, which came into force in April this year. UK employers with an annual wage bill of more than £3 million must spend 0.5% of that total on the Levy.
The Apprenticeship Levy is paid to HMRC with the purpose of encouraging employers to invest in apprenticeship programmes. Employers can access funds raised through the Levy to pay for apprenticeship training. The Government has set a target of creating 3 million more apprenticeship places in the UK by 2020 to help boost economic productivity and growth.
Investing in employees
In practice this means that companies that see the Apprenticeship Levy as an investment in their employees are likely to gain more benefits than those that see it as another tax they have to pay.
Employers must spend the funding raised through the Levy on government-approved apprenticeships that have passed financial and quality tests; these cover a wide selection of subjects and business areas including areas such as technology and engineering.
Something organisations need to keep in mind is that any unspent funds will expire after 24 months meaning that organisations must use the funds in their apprenticeship account or they will lose the money.
Karen Woodward, a Director with the National Apprenticeship Service (NAS) stated that employers would be in a position to plug skills gaps within their organisations and that the anticipated improved skill levels could result in organisations improving their staff recruitment and retention.
How are SMEs affected by the Apprenticeship Levy?
For SMEs (and any company with an annual wage bill under £3 million) this has been seen as an opportunity by some and been received with more of a mixed reception by others. The Levy means that non-Levy paying employers will contribute 10% of the cost of an apprenticeship, with the government paying the other 90%.
This means that employers will get help from the Government to train employees. However, some have argued that the changes do not benefit their organisations and that the 10% cost, which must be paid up front, is in fact more damaging for smaller organisations than paying the equivalent over the course of 12 months as a tax would be.
For further details about the Apprenticeship Levy see the link below:
The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.
How Tracker Intelligence can help recruiters
Tracker makes it easy for you to identify public sector opportunities and access meaningful market and industry news, while providing you with the vital competitor insight you need to keep your business one step ahead.
Since the Levy was introduced Tracker Intelligence has published 339 related notices with more to come. Every day Tracker publishes thousands of public and private sector awards and notices like these. Try our free tender search and see for yourself the current notices and awards related to recruitment and apprenticeships.
A number of organisations including local councils have published notices that those looking to recruit in the public sector should be aware of. Recruiters can take advantage by engaging early with public sector employers to meet their recruitment needs. Tracker sends real time email alerts of opportunities as soon as they are available.
Using Tracker you can easily access opportunity documents, upload and work on winning responses, track progress and collaborate with anyone, anywhere, at any time – all at the click of a button.
Tracker is the only end-to-end business development solution with the unique intelligence you need to find, bid for and win more business – try the Tracker Premier package and see the results for yourself with a free trial.
Last updated on August 15th, 2017
Aug 10, 2017.