The government has set a target for 3 million apprenticeships to start in England by 2020. To support this goal, a series of changes in the way apprenticeships work have been announced.
From April 2017, all employers with a wage bill of more than £3 million will pay an apprenticeship levy equal to 0.5% of their wage bill. The money generated will be used by these employers to pay for their apprenticeship training.
Calculating your payments
Your payments will be calculated at a rate of 0.5% of your UK wage bill, minus the government’s allowance of £15,000.
So if your wage bill is £5 million, your annual levy payments would be £10,000.
This money, plus a 10% top-up from the government, will be added to your Digital Apprenticeship Service (DAS) account as digital vouchers from late May 2017.
You can estimate how much your levy payments will be here.
Using your digital vouchers to pay for apprenticeship training
As a levy payer, you will pay for apprenticeship training and assessments via your DAS account from May 2017. You can spend your digital vouchers on apprenticeship training for new apprentices and existing staff.
There are three things to think about when planning how to spend your levy:
- What existing training programmes do you have in place that could be an apprenticeship? e.g. management training
- What other training and progression requirements do you have amongst existing staff e.g. accountancy, team leading and marketing
- Where might you want to recruit new apprentices e.g. in areas of the business where you have skills shortages and/or are expecting growth
Once all of your digital vouchers have been spent, you can still take on extra apprentices. The government will fund 90%.of the cost of the apprentice, and your organisation will have to contribute just 10%.
Any un-spent vouchers in your digital account will be removed after 24 months. This will be used to fund apprenticeship training for smaller non-levy paying organisations.