As part of the Comprehensive Spending Review (CSR), the government has published its response to the apprenticeship levy consultation.
The levy will come into effect in April 2017, and:
· Will be payable by employers at 0.5 per cent of their pay bill
· All employers will receive an allowance of £15,000 to offset against the levy, which means the levy will only be payable on a pay bill in excess of £3 million per annum
· Employers with a pay bill of less than £3 million won’t pay anything but will still be able to draw down funds to deliver apprenticeship training.
The introduction of the levy is to put investment in apprenticeships on a long-term, sustainable footing. It will be collected through the pay as you earn (PAYE) system and HMRC will work closely with employers to minimise the impact of implementing these changes.
The Department for Business Innovation and Skills will establish a new body to maintain an oversight of the levy and how funding will be allocated back to employers. This body will also ensure quality in the apprenticeship system.
The cost of delivering apprenticeships for 16–18 year olds is often higher, due to the need for more pastoral care or support with additional skills training. The government will continue to engage with employers so they are not discouraged from taking on young apprentices.
Responding to the announcements made in the CSR, NHS Employers said it was concerned by the additional charges for employers through the apprenticeship levy.