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Apprenticeship Levy


From April 2017, the way in which the Government funds and delivers Apprenticeships in the UK will undergo massive changes. Where government funding has previously gone straight to colleges and training providers, the new system will generate apprenticeship funding accessible by employers through the Apprenticeship Levy which will come in to effect on 5th April 2017.

From this date employers will pay a levy of 0.5% of their pay bill through PAYE. However, this levy is subject to a £15,000 Levy Allowance, which in effect means that only companies with a pay bill of more than £3million will be liable for the levy. Employers will then be able to use their ‘levy pot’ of funds to buy apprenticeship training through their Digital Apprenticeship Service account and will be able to take out more than they put in through a Government top-up.

Employers not liable for the levy will still be able to take advantage of apprenticeship funding through a co-investment scheme.

In addition, larger employers in the Public Sector will be subject to the Enterprise Bill, which will create thousands more apprenticeships in the sector by setting a target to employ apprentices into a minimum of 2.3% of the public sector workforce.

Further changes and improvements are also already underway in the assessment and delivery of apprenticeships

If you have any enquiries or require any information about how Nescot can help with your business training needs, please contact our dedicated Employer Hub.





From April 2017, if your company has an annual pay bill of more than £3 million, you will be liable to pay the Apprenticeship Levy. Your levy payments will be held for you to use in your digital account under the new Digital Apprenticeship Service (DAS)

· The Apprenticeship Levy will be paid by UK employers to fund new apprenticeships

· The levy will be 0.5% of your gross pay bill, paid through PAYE

· There will be an allowance of £15,000 to offset against levy liability. The allowance is not a cash payment and cannot be used to purchase apprenticeship training

· In effect, any UK employer, in any sector, with a pay bill of more than £3 million per year is liable to pay the levy

· Additional funding may also be available for employers taking on a 16-18yo apprentice or a young care leaver with an Education, Health and Care Plan

· Employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay into the levy, through a monthly 10% top-up to their digital account

· An employer can ‘spend’ their levy funds in the form of an electronic voucher

· An employer who wishes to spend more than the amount in their digital account will have 90% of their additional apprenticeship training costs funded by the government

· Funds in the digital account will have to be used within 24 months or the electronic vouchers will be lost

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Your digital account can pay for:

· Apprenticeship training and assessment of a new apprentice

· Apprenticeship training and assessment to up-skill existing staff

The digital account cannot be used for:

· Costs associated with recruitment or employing an apprentice

· Salaries or payments made to apprenticeships

· Other training or assessment that is not eligible for Apprenticeship funding

For more information, go to the Government website

https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work

Nescot’s free service will support you in planning, developing and delivering your chosen apprenticeship programmes and in managing your Digital Account. Our support will ensure that your levy funds are effectively utilised to add maximum value to your business.

From April 2017, if your company has an annual gross pay bill of £3 million or less, you will not be liable to pay the Apprenticeship Levy

· If you are a non levy paying employer with 50 or more employees, you will be required to pay a contribution of 10% of the training and assessment costs of an apprenticeship

· If you have fewer than 50 employees, apprenticeships for 16-18 year olds will be fully funded. For apprentices aged 19 years and above, you will be required to pay a contribution to the training costs

· Additional funding will also be available for employers taking on a 16-18yo apprentice or a young care leaver with an Education, Health and Care Plan

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Apprenticeship funds can be used to pay for:

· Apprenticeship training and assessment of a new apprentice

· Apprenticeship training and assessment to up-skill existing staff

Apprenticeship funding cannot be used for:

· Costs associated with recruitment or employing an apprentice

· Salaries or payments made to apprenticeships

· Other training or assessment that is not eligible for Apprenticeship funding


The Government wants to ensure that the Public Sector is a model employer in contributing to achievement of the target of 3 million apprenticeships by 2020.

The Enterprise Bill 2016:

· Provides a power for the Secretary of State to set targets for public sector bodies in relation to the number of apprentices who work for them in England.

· Applies to larger public sector organisations, at present defined as public bodies with 250 employees or more.

· Sets a target that 2.3% of workers (based on headcount) starting each year in larger public bodies in England will be apprentices.

· Require these bodies to have regard to any targets set on them and to report annually on progress against meeting those targets.

Public Sector employers should also refer to information on the Apprenticeship Levy

New Apprenticeship Delivery:

Over the next few years, the current Apprenticeship Frameworks will be replaced by new Apprenticeship Standards.

As a result of the Government reforms, a new style of apprenticeship has been designed to meet the changing needs of employers, learners and providers. These new apprenticeship standards are being designed groups of employers - these groups are known as ‘Trailblazers’

Apprenticeship standards:

· Give employers control in designing apprenticeships

· Increase the flexibility of delivery

· Simplify the funding system

· Increase the effectiveness of training

End Point Assessment (EPA):

The introduction of independent end-point assessment (EPA) is one of the biggest changes in the Government’s Apprenticeship Reforms.

EPA is a new way of assuring quality in the apprenticeship system and will replace the existing model of continuous assessment throughout the term of the apprenticeship. This assessment will be carried out by separate college or training provider to the one delivering the learning.

Once an apprentice has completed their apprenticeship, they will be ‘signed off’ by their employer as being ready for their knowledge and practical capabilities to be assessed. In most cases, the assessment will be graded and must provide evidence that the apprentice is fully competent and productive in the occupation.



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