GP Strategies offers a comprehensive levy management service to guide and support our levy paying employers through the minefield of levy processes and procedures.
What is the Apprenticeship Levy?
The Apprenticeship Levy is a compulsory ‘tax’ which aims to fund the development and delivery of three million new apprenticeships by 2020.
All employers in the UK with a wage bill of more than £3 million must pay 0.5% of their payroll into a central levy ‘pot’, which can then be used to fund apprenticeships. Employers have an allowance of £15,000 per year to offset against their levy payment.
The levy is paid monthly on a rolling basis to HMRC and will be collected through the PAYE system alongside income tax and National Insurance. Employers can access their levy contribution in an online digital account, which can be used to pay for apprenticeship training and assessment.
Funding for non-levy paying employers
SMEs with a wage bill under £3 million (non-levy employers) contribute 5% of the apprenticeship cost, the government will pay the remaining 95%. This also applies to levy paying employers who have exhausted their funds.
The government will fully fund the training costs for apprentices aged 18 or under who are employed by an organisation with fewer than 50 employees.
New incentives from both levy and non-levy paying employers available from 1st April 2021 to 30th September 2021 include £3,000 per new hire, regardless of the apprentice’s age.
An additional £1,000 bonus is available for taking on and training an apprentice aged 16-18 or aged 19-24 leaving care or who have a Local Authority Education Health and Care (EHC) plan.
Maths and English training for apprentices is fully funded.
Employers are not required to pay National Insurance Contributions for apprentices under the age of 25 on earnings below the higher tax rate of £827 a week (£43,000 a year).
Did you know you can now transfer your funds to other employers?
If you are a levy paying employer, you can now transfer up to 25% of the annual value of funds to other employers to pay for their apprenticeship training and assessment. These transfers provide more flexibility and will help larger employers with unspent levy funds to support smaller employers in taking on apprentices
GP Strategies offers an end to end levy management service for everything you need to effectively manage your apprenticeship levy.
If you are a levy paying employer and need advice and support, please contact our specialist team on 0330 1000 610.