Since the launch of the Apprenticeship Levy in April 2017, some businesses are yet to use the Levy to its full potential and are still confused with how they should use their funds.
In this guide, we’ll explore everything you need to know about the Levy and break it down in simple, easy to follow steps.
Confusion around the Levy
The Levy has been in place for six months, however a recent study found that one in four firms paying the Levy still do not understand how the new system works. With total apprenticeship starts falling 61 per cent in May, June and July, compared to the same period last year – something has to be done to improve take up.
The Apprenticeship Levy was designed to improve the UK’s productivity by creating and funding three million apprenticeship starts by 2020. The process of paying and recouping the Levy can be complex, so we’ve put together a handy guide and infographic to explain each party’s roles, step-by-step.
How much you need to pay
To start things off, you’ll need to calculate your Levy contributions based on your payroll for the year ahead and inform HMRC. From there, the government will verify what you’ve paid and pass the information onto the Department for Business Innovation and Skills.
The funds you’ve paid will go into your Apprenticeship Service Account (ASA) and the government will pay 10 per cent on top of the amount you have to pay. Once this has been done you can start the process to commission a training provider and procure apprenticeships or training. You will need to use your funds within 24 months otherwise they will expire and other companies will be able to use your funds.
How to set up an Apprenticeship Service Account
Before setting up your Apprenticeship Service Account, you’ll need to talk to your HR, payroll and finance departments about your Levy funds and how you intend to use them. On the government website, you will find everything you’ll need to do before setting up your account.
Once you’re ready to set up your account and have all the documents required, start the process here and follow the easy steps.
We’ve put together a step-by-step guide on how to use your Apprenticeship Service Account – from setting up users to managing your apprenticeship delivery and reviewing your training funds.
What can the Apprenticeship Levy be used for?
Many people see ‘apprenticeships’ and think it’s just about taking on a young person in an entry-level role. However, this is not the case – you can use your Levy funds to upskill existing staff, no matter what age. New standards are currently in process to reflect employer’s priorities with developing their workforce. Apprenticeship standards are replacing apprenticeship frameworks – they’re designed by employers to ensure apprenticeships support employer needs. They support apprentices to gain appropriate knowledge, skills and behaviours for a specific role.
To find out how you can use the Levy to best meet your company’s training and development requirements, take a look at our guide here.
How much will it cost?
As you’re aware, the way apprenticeship funding works has changed – with apprenticeship standards and frameworks being fitted into 15 funding band limits. Each funding band has an upper limit that indicates how much funding or government co-investment can be used to pay for apprenticeship training.
You can find out where your chosen apprenticeship standards or frameworks sit in the funding bands here.
Funding bands don’t have a lower limit – meaning you can negotiate varying costs depending on your needs and circumstances. We’ve highlighted how the Levy funding bands work in our helpful guide here.
Now you know everything to get you started with the Apprenticeship Levy – it’s time to put it all into practice.
We can manage, implement and provide hands-on support for practically every element of the Apprenticeship Levy. We offer a three-step project management service to help you get the most out of the Levy.
Talk to our Levy team to find out more.
Over to you
And if you’re looking for hands-on support for your Levy account, book an obligation-free chat with our Levy Team or download our complimentary eBook guide on the Apprenticeship Levy now: