Changes to the Apprenticeship funding rules, offers good news to both non-levy paying employers and larger levy paying organisations.
10% Contribution to be halved
The 10% funding contribution that non levy paying employers have to make towards the cost of the apprenticeship programme is now being reduced to 5%. This offers companies with a payroll below £3m an even greater incentive to recruit a new apprentice or upskill a current employee.
25% Levy donations
Levy paying organisations can now donate up to 25% of their Levy pot towards supporting SME’s in funding their own apprentices. This has proven to be a great way for large companies to utilise their Levy funds. Two of our clients, Timpson’s and Bruntwood, have both donated portions of their levy funds to Mahdlo Youth Zone, to aid in the development of two level 4 accountancy apprentices. There are no restrictions on the number of companies you support, only that you do not exceed 25% of the value of your funds.
Information on Timpson Group donating their levy can be found here.
Information on Bruntwood donating their levy can be found here.
The Apprentice Academy are helping these larger organisations ‘have a say’ in how they spend their tax and we can put more companies in touch with smaller organisations who are looking for levy sponsors to help them develop their staff.
Withdrawal of Levy Funds
Levy paying employers will begin to lose unused funds from their pot from April 2019. It is now 2 years since the levy was introduced, which means that unutilised funds in your levy account will start to be withdrawn. To prevent levy being lost, companies need to act quickly to use up their funds.
All our apprenticeship programmes can be funded by the levy, these include our Accounting, Leadership and Management, Procurement, Business Administration and the newly launched Housing/Property Management programmes.
Recap on how to spend Levy Funds
Levy funds are spent on the training and assessment provided to an apprentice on an approved Apprenticeship standard or framework. It can’t be spent on things like internal training or apprentice wages. The funds are accessed through a digital apprenticeship service, or DAS account that employers are set up on when signing up an apprentice. This account links to PAYE schemes. Digital vouchers are used to reclaim levy contributions. Employers can use these vouchers to pay for training apprentices.
Overall, these changes allow companies to invest in their workforce and develop new talent. If you want more information on how to do so, please don’t hesitate to contact us.
Call us on – 0161 200 1673