It has been more than six months since the start of the government’s new Apprenticeship Levy scheme and it would be fair to say that it has not been entirely plain sailing. The statistics show a 61% decrease in apprenticeship starts since May, compared to the same period in 2016. By the end of August, only half of eligible, levy-paying companies had registered to use their levy.
The roll out of the Apprenticeship Levy has been highly criticised by industry experts who, rightly it seems, claim that eligible employers did not understand the system or its application to their businesses. Adding to the poor understanding of the ‘Levy’ is the equally misunderstood term – ‘Apprentice’. To many the stereotypical apprentice looks something like the one in the photo: a young 16 – 18-year-old fresh out of school and starting a vocational qualification, whereas the reality is that it could be anyone 16 -64 years old, who is doing one of over 200 on-the-job learning courses to up-skill them.
With all this confusion it seemed worth highlighting some facts surrounding the Apprenticeship Levy:
- If you are an employer with a wage bill of £3m per annum or more then you are paying the Apprenticeship Levy.
- The Levy is drawn down monthly (from April 2017) through the PAYE system at a rate 0.5% of your wage bill over £3m per annum.
- It is held centrally by the government and can be used by the contributing employer to fund apprenticeship training, delivered by an approved training provider.
- Employers have 2 years to utilise funds or they are lost.
- An Apprentice can be someone newly hired into your organisation, specifically as an apprentice, who will undertake their training with your company as a precursor to hopefully securing a fulltime job.
- Apprentices can also be an existing member of staff who the company wishes to upskill through the delivery of an on the job training course.
- Always Consult specialise in the delivery of on the job, leadership and management training to existing employees. We can conduct an organisational needs analysis to identify the people that would benefit most from this training.
Perhaps most crucial of all – do not see the Apprenticeship Levy as another tax. The money is yours to use and can buy you valuable training, that will enhance the productivity of your staff and the efficiency of your organisation.