The Apprenticeship levy
Employers with a total wage bill in excess of £3million will pay the levy. There is a £15000 allowance / year which means in effect the 0.5% is paid on the payroll amount greater than £3 million. The levy is collected monthly through PAYE at the rate of 0.5% and is then topped up by the government with a further 10%. Funds are held in your organisation’s digital account and can only be used to fund apprenticeship training. Funds must be used within 24 months of entering your account, or they will be clawed back by the government. If an Employer has insufficient funds to pay for all the required training within their digital account, the government will fund the additional costs at 90%, to top up the 10% paid by the employer.
Non levy paying organisations
Organisations with a wage bill less than £3 million will not pay in to a levy account. These organisations choose their Apprenticeship training provider from a ‘smaller’ approved training provider list on ROATP, and agree the price for Apprenticeship training, paying 10% of the cost with the government paying 90%.
Small employers with less than 50 staff……
Employers with less than 50 staff are subject to the above funding rules for “non levy” paying organisations, with the exception of employing 16-18 year old Apprentices, in which case the government will fund the total cost of the apprenticeship training