Apprenticeship Levy

Apprenticeship Levy

How the Levy will affect business

The Apprenticeship Levy is a Government initiative that will see a levy applied to large UK companies in every industry. The scheme is designed to fund apprenticeships, contributing to the Government’s target of backing a further 3 million by 2020.

Both the quantity and quality of apprenticeships look set to improve as the Government renews its commitment to investing in apprenticeship training. Employers will also benefit from access to funding to take on apprentices and train existing employees.

At Dimensions Training Solutions we can support you to train and upskill existing staff, with Apprenticeship programmes, and connect your company with the next generation of talented school leavers.

Your business will only pay a Levy if:

  • Your payrole for staff is over £3 million per annum. Regardless of the number of Apprentices already employed
  • An annual payroll of less than £3 million means that no payment is needed, but you will still receive Government support for apprenticeships.
  • You can find out how to make the most of Apprenticeship Levy funding by getting in touch with DTS, we can guide you through the entire process supplying as much, or as little support tailored to suit your organisation. For more information, please email:
  • The Apprenticeship Levy will be introduced on 6th April 2017.
  • Any company that exceeds an annual pay bill of £3 million must make a levy payment, regardless of any current apprentices employed.
  • Employers will pay the Apprenticeship Levy through PAYE, with Income Tax and National Insurance. Payment will be at a rate of 0.5% of their payroll.
  • Companies are not required to pay the initial £15,000 of the Apprenticeship Levy, which ensures that only payrolls of above £3 million a year will be affected.
  • Businesses of every size will be supported by the Government to take on apprentices and provide existing staff with Apprenticeship opportunities.
  • Organisations in the public sector will be eligible to make payments and apprentices must make up at least 2.32% of their workforce.
  • From April 2017, the Apprenticeship Levy applies to companies across every sector. Employers will pay through PAYE at a rate of 0.5% of their annual payroll. Businesses are entitled to a £15,000 allowance, meaning that only 2% will qualify to pay each year.
  • The Apprenticeship Levy will give more young people a direct pathway to employment, while also supporting employers with staff development. If you pay into the scheme, your contributions can be converted into digital vouchers. Companies in the UK can use the vouchers to take on new apprentices, within the first 18-24 months, by submitting evidence to redeem them.
  • A 10% top-up payment will also be supplied by the Government. There may be future opportunities to access further top-ups and invest in more apprenticeships. A long-term commitment to training school leavers could see employers get more back than they put in.
  • The Government aims to encourage more companies to get involved with apprenticeships. This will provide a sustainable solution to employment challenges and national skills gaps.
A
500 employees - each have gross salary of £20,000.
Payroll: 500 x £20,000 = £10,000,000
Levy amount: 0.5% x £10,000,000 = £50,000
Allowance:
£50,000 - £15,000 = £35,000 annual payment.
B
250 employees - each have gross salary of £20,000.
Payroll: 250 x £20,000 = £5,000,000
Levy amount: 0.5% x £5,000,000 = £25,000
Allowance:
£25,000 - £15,000 = £10,000 annual payment.
C
150 employees - each have gross salary of £20,000.
Payroll: 150 x £20,000 = £3,000,000
Levy amount: 0.5% x £3,000,000 = £15,000
Allowance:
£15,000 - £15,000 = £0 annual payment.
D
100 employees - each have gross salary of £20,000.
Payroll: 100 x £20,000 = £2,000,000
Levy amount: 0.5% x £2,000,000 = £10,000
Allowance:
£10,000 - £15,000 = £0 annual payment.
  • The Government’s new initiative will raise £3 billion in 2019-20 and £2.5 billion will go towards UK apprenticeships.
  • Investment in training for young people is set to double.
  • SMEs will have ongoing support to add apprentices to their workforce.
  • Upskilling of existing staff will add value and flexibility to businesses of all sizes.

You can find out more about reforms to apprenticeships by visiting the Government site - click here to view pdf>

Why choose DTS for Apprenticeships?

Experienced education providers - we have spent years working with business upskilling existing staff on apprenticeship programmes and recruiting hard working young people that can make an impact.

Provide a detailed training needs analysis - liaising with you to upskill your existing workforce to meet your business objectives.

A dedicated selection process - from posting advertisements, to reviewing CVs and interviewing candidates, we take over the time-consuming tasks. You can choose your apprentices from our final shortlist.

Unique digital management systems - you can log onto our state-of-the-art PEARL system to monitor recruitment and track the progression of your apprentices. Streamline your admin procedures at no extra cost.

Dimensions Training Solutions is well-equipped to provide all the advice and information you need to successfully respond to this Government initiative. Discover how you can bring in new skills and upskill your current workforce to enhance your business objectives.

Contact our friendly team to find out more about the Apprenticeship Levy and how to redeem your digital vouchers: levy@dimensionstrainingsolutions.co.uk or call: 01162 982 366