Topic Author:

Malcolm Fillmore

Topic posted on:

10:11 GMT 03.05.16


The Apprenticeship Levy – new for April 2017

From next year larger employers will start to pay a levy which will be allow them to pay for Apprenticeship training within their organisations. The Levy is compulsory for all employers with a paybill over £3m per annum, and if they don’t utilise it within 18 months the amount contributed will be taken by the government as a non-refundable tax. The idea is to “encourage” larger organisations to train Apprentices.

There is a small contribution of 10% added by the government (BIS) on top of the Levy, so the purchasing power of the funds are increased. The employer is then expected to organise approved Apprenticeship training by negotiating courses with government approved providers. Once authorised the funds kept by BIS will be paid over to the approved body. Funds can also then be used to pay Apprentices wages as well. Apprentices under 25 also now no longer attract employers national insurance contributions, which at 13.8% are also a key incentive.

Planning Point:

If you currently have, or expect to have, a paybill for your business over £3m per annum you should start to plan to a pilot Apprenticeship scheme in order to utilise the Levy that you will be required to pay from next April. Keep an eye on your business trade press for more details from relevant Apprenticeship training organisations.

Note: The Levy is proposed to initially be 0.5% of the paybill, but with a fixed annual allowance of £15,000 deducted against this amount. This effectively means that nothing is contributed until the paybill exceeds £3m.





Nigel Haigh

10:11 GMT 03.05.16