The Government has published draft legislation relating to
the introduction of the Apprenticeship Levy, which is expected to
come into force on 6 April 2017 and would be a significant change
to the way in which apprenticeships are funded. Subject to certain
thresholds, the Levy will apply to all employers.
The Chancellor first announced his plans for an Apprenticeship Levy in the Summer Budget 2015. A consultation then followed to take into account the views of employers and any other interested parties.
The Levy is being introduced to support the Government's commitment to improving the quality and quantity of apprenticeships available. It is hoped that the Levy will fund three million apprenticeships by 2020.
The Levy will be charged at a rate of 0.5% of an employer's annual payroll bill. Each employer will be entitled to an annual allowance of £15,000 to offset against their Levy payment and, as a result, the Levy will only be payable by employers with a payroll of over £3 million. It will however be payable whether or not an employer employs any apprentices. In order to keep the procedure as simple as possible, the Apprenticeship Levy will be payable through the PAYE system.
Industries that already operate levy systems will still be required to pay the Apprenticeship Levy. It is understood that the Industry Training Boards for the construction, engineering construction and film industries will consult with their members on potential changes to their existing levy arrangements.
The finer detail on how employers will access levy-generated funding for apprenticeship training in England, Scotland, Wales and Northern Ireland has yet to be finalised.
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.
