The apprenticeship levy was introduced in April 2017 and now requires all employers operating in the UK, with a pay bill of over £3 million each year to invest in apprenticeships. The funding policy supports the changes to the way apprenticeships in England are paid for, underpinned by the apprenticeship levy of 0.5% of the annual pay bill for companies paying over £3 million per year.
The Government has also proposed to co-invest 90% of the costs of apprenticeship training for those businesses who will not be paying the levy.
Once payments have been declared to HMRC, employers will now have access to a digital apprenticeship account from which they will be able to access funding to pay for apprenticeship training.
Through the new Digital Apprenticeship Service, employers are able to choose their training providers, select organisations to assess their apprenticeships, and post their apprenticeship vacancies. The Government will top up funding by 10%, meaning that for every £1 that enters the account, employers will have £1.10 to spend on training.
From May 2018, employers will be able to transfer up to 10% of their levy funds to one other employer. Find out more here - www.gov.uk/guidance/transferring-apprenticeship-service-funds
Please note that due to the nature of apprenticeships and how they are funded (by the government and the employer), apprentices will not be eligible for student finance - this includes tuition fee loans and maintenance loans.
Find out if your organisation is paying the apprenticeship levy and how much you will now have available to spend on apprenticeships with the Apprenticeship levy calculator