We all like to spend. How can you use the Apprenticeship Levy to benefit your business?
As of May 2017, any employer with an employee payroll of over £3m will pay 0.5% into the Apprenticeship Levy. Therefore, you might as well make the most of it.
Let’s start with the good news… firms will receive an annual allowance of £15,000, which can be effectively deducted from the 0.5% paid. What’s more, employers paying the levy receive a 10% top-up towards monthly contributions they make.
Here are four ways to make the Apprenticeship Levy work for your business:
1. Upskill existing employees
Most people have heard about the levy but don’t really understand it or what it means for their business. It is a common misconception that apprenticeships are for technical or vocational skills, and a route to recruiting and training inexperienced, entry-level staff. The truth is that apprenticeships can offer a valuable way of upskilling all levels of staff, from newcomers right through to the executives.
Training does not necessarily have to be at a level higher than existing qualifications of the staff, so you’re not restricted there.
Bear in mind that, if you started training for apprentices before 1 May 2017, then the levy will not affect the way you fund it.
2. Train senior managers
You can use the levy payment to pay for leadership and management training of senior managers. Apprentices can be anyone aged 16 or over, as long as they spend at least a fifth of their working week training and studying. The duration of the apprenticeship must be between 1 and 5 years. After the process of hiring an apprentice has been completed, funds will be deducted from a company’s digital account each month.
3. Make the most of the allowance
Ensure the process of hiring an apprentice is completed through the digital system:
- Make an account
- Add any connected companies or charities and link your PAYE schemes
- Sign the agreement available
- Authorize payment to the training provider
- Select the organisation in charge of assessing the apprenticeship
- Choose an apprenticeship standard.
- Report and pay the company’s levy payment to the HMRC through the PAYE process in order to receive digital vouchers which expire within 24 months.
4. Work with new talent on a trial basis
Attract new talent without having to make a permanent decision. The apprenticeship vouchers can be used for training and assessment with any approved provider. Your training organisation can advertise your apprenticeship through the government’s online apprenticeship search tool.
Be aware that the apprenticeship must conform to the following rules in order to qualify:
- Work towards government approved standards and frameworks
- Pay at least the minimum wage
- An apprentice must work with experienced staff and learn job-specific skills.
If you’d like to learn more about the Apprenticeship Levy and how it can benefit your business, contact our Director, Carl Hinett via our website or by email.