The Apprenticeship Levy is fast approaching – before we even know it, it’ll be well under way. At the moment, there’s a lot of speculation around whether or not it’s going to work.
Our answer to that – it’ll work for you, if you make it so.
According to the 2016 AGR Annual Survey, Apprenticeship vacancies were up by 13%, already showing that more is being done to increase the recruitment of Apprentices, as opposed to the recruitment of Graduates (who saw a decrease in vacancies of 8%).
With that being said – are you ready for the Apprenticeship Levy?
Understand how the Apprenticeship Levy works
First things first – you need to know whether or not you’re paying the Levy.
In its simplest form – if you have an annual pay bill in excess of £3 million, you will contribute towards the Apprenticeship Levy. If your annual pay bill is £3 million or below – you won’t. As far as statistics are concerned – around 2% of UK businesses will be contributing towards the Levy.
So, the other 98% need to know how to maximise their benefit from it.
One of the most important details to be aware of is, even if you aren’t contributing towards the Levy – you can still benefit.
For those of you who are contributing – HMRC will take your contribution on a PAYE basis. This will be paid into a Digital Apprenticeship Service online account that only you can use. Also, on top of the contribution that they take from you – they give you an additional 10%. This money then has to be spent within 24 months of it landing in your account.
For those of you who aren’t contributing – you do still have access to Government funding. You will only have to contribute 10% of the costs of training, with the Government paying the remaining 90%.
What can I spend my Levy on?
Of course – there is no obligation to spend anything through the Levy. However, you stand to lose more if you contribute towards the Levy and don’t spend it, because the vouchers expire.
The Levy only covers the cost of training your Apprentice – the costs associated with salaries, recruitment and onboarding are to lie solely with you. Also, you’re only able to use recognised and registered Apprenticeship Training Providers.
This is the case regardless of whether or not you contribute towards the Levy.
It’s a common misconception that the Apprenticeship Levy can only be spent on what is typically seen as an Apprentice. This isn’t the case at all.
Despite not being able to spend your Levy fund on recruitment or apprentice salaries – you are able to offer apprenticeships to your existing staff.
Your existing staff will be eligible as long as the apprenticeship is relevant to their role, and the most appropriate route for progression and development in their career.
However, an apprenticeship is subject to a minimum length of 12 months. So, if a member of your existing staff is on a contract of employment, they’re still eligible providing they’ll be able to be an apprentice for a minimum of 12 months.
The current funding rules for the Levy state: as long as the apprentice does not have a qualification higher than the apprenticeship standard – they are eligible.
In this sense, you are able to offer apprenticeships to graduates. However, there is still some clarification required on the funding rules that will apply to the Levy.
For example, referring back to your ability to use the Levy fund to offer your existing staff an apprenticeship: if the graduate already holds a Level 6 Degree Apprenticeships, but a Level 4 Higher Apprenticeship is relevant to their role in terms of career progression and development – are they eligible to be made an apprentice and, subsequently, be trained through the Levy?
To view a list of all of the approved apprenticeship standards, click this link – https://www.gov.uk/government/publications/apprenticeship-standards-list-of-occupations-available
In conclusion – companies are able to benefit greatly from the Apprenticeship Levy. Apprenticeship recruitment is fantastic for filling skills gaps and reducing the issues associated with an ageing workforce. The trick is in planning and preparation.
If you use the Apprenticeship Levy the way it’s meant to be used – there is no end to the benefits that you can see.