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
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.
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.
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The Court of Appeal has held that where a contract of employment lacks a provision for when notice of termination takes effect, it is effective from when the employee personally takes delivery of the letter containing notice.
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