Many businesses are urging the Government to delay implementation of the new apprenticeship levy until the impact on employers, of the recent vote to leave the EU, is better known. However, the Government is pressing ahead with its plans to introduce the levy on 6 April 2017.
It is hoped the apprenticeship levy will improve the focus placed on developing the skills of young people in England by encouraging more small enterprises to offer apprenticeships.
The Government revealed the main principles of the levy earlier this year, confirming that employers in any sector with a pay bill of more than £3 million each year will be required to contribute to the levy at a rate of 0.5 per cent of their annual pay bill through their PAYE arrangements. However, there will be a deductible levy allowance of £15,000 per year which will operate on a monthly basis and any unused allowance will be permitted to be carried over to the next month.
The Government's latest suggestions include:
- an ability for employers to access the funds generated from 1 May 2017;
- 90 per cent of the costs of the training to be paid by the Government in the case of smaller businesses;
- the ability for employers to use the levy to retrain existing workers in new skills, even if they have higher qualifications, on the condition the apprenticeship training is significantly different from their existing qualifications;
- an apprenticeship funding system made up of 15 "bands", each with an upper limit ranging from £1,500 to £27,000;
- the creation of a new register of training providers, which will be ready for use from April 2017; and
- an additional payment of £2,000 from the Government to employers and providers who take on 16 to 18 year olds, young care leavers and people with an education, health and care plan.
Whilst the most recent proposals are still under consultation, and may be subject to change, they give us an indication of what to expect in October, when the final regulations will be confirmed.