Are you ready for the Apprenticeships Levy?
It’s not hard to understand why over 130,000 businesses in the UK offer apprenticeship places. Apprentices can bring numerous advantages to organisations, from filling the skills gaps within their workforce to improving their business performance as a whole.
Research carried out in 2016 has revealed that 75% of employers reported that it has helped their business improve the quality of their product or service. Equally positive is that 92% of employers who recruit apprentices believe that it leads to a more motivated workforce.
In a bid to raise the number and quality of apprenticeships in the UK, the government will be introducing in April 2017 the apprenticeship levy. The levy will fund the government’s plan to achieve 3 million apprenticeships by 2020.
Only businesses with an annual wage bill of over £3 million will be required to pay a levy, which cost 0.5% of their monthly payroll. Employers have an allowance of £15,000 to offset against the amount they pay.
The good news is that the government will top up companies’ contributions by 10% and employers will be able to access an online digital apprenticeship service account to check their contributions. Funds in this account will expire 24 months after they are available unless they’re spent on apprenticeship training. And, unused levy funds, will be used by the government to fund apprenticeships training for small businesses.
The idea is that, by 2020, all employers will be able to use the digital apprenticeship service to pay for the training and assessment for apprenticeships.
This is definitely positive news as by taking on apprentices, you are not only helping the development of an individual but you are also benefiting from growing your own talent, moulded to suit your organisations’ culture and processes. In fact, 83% of employers who employ apprentices rely on their apprenticeships programme to provide the skilled workers that they need for the future.
You can find out more about the apprenticeships levy and how it could affect you by visiting the government website.