In seven months' time (April 2017), all UK employers with an annual pay bill in excess of £3m will pay an apprenticeship levy of 0.5% of their annual pay bill through the PAYE system. The idea is that the levy is paid into an account through which these employers can access funding for apprenticeships.
The levy applies UK-wide, but education and training is a devolved policy, which means that authorities in each of the UK nations manage their own apprenticeship programmes. It is extremely likely that the schemes put in place in England, Scotland, Wales and Northern Ireland for accessing the funding will all operate differently.
For example, the UK Government's current consultation includes rules on what the employer can and cannot spend the apprenticeship funds on. It proposes that the funding can be used only towards the costs of apprenticeship training and end point assessment. However, the Scottish Government's consultation, which closed recently, suggested a more flexible approach which sees levy funding supporting workforce development more widely. On the face of it, employers of Scotland-based employees may be able to use the levy funding to help with apprentice travel costs or wider workplace training programmes, for example.
This may be another administrative headache for employers with cross-border operations and training activities.
It is also proposed that the geographical split will be calculated based on HMRC's records of the home address of employees. The UK government and the devolved administrations say they are working together on the scope for reciprocal funding arrangements for employees who live in, for example, England but who may work elsewhere in the UK.
For more information about the apprenticeship levy, see our earlier updates here and here.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
