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APPRENTICESHIP LEVY
Bringing the new
into focus
HELLO
1
THE WAY THE GOVERNMENT FUNDS APPRENTICESHIPS IN
ENGLAND IS CHANGING IN APRIL 2017.
A revolutionary new system will give employers in England greater control over
apprenticeships and how they’re run, with businesses gaining the power to decide
which providers they use to train their apprentices. A digital apprenticeship system and
online payment portal will also enable the purchasing power to lie solely with you, the
employer.
Some employers will be required to contribute to a new Apprenticeship Levy, which will
be automatically collected via HMRC. For all other employers there will also be
changes to funding, with a requirement that employers will co -invest the delivery.
Announcements about these changes are being made by the Government. They are
fairly challenging and detailed, with some points still under consultation.
This document has been produced to help explain the new Levy and funding. It will
also outline how N&B Training can support and guide employers through the complex
variations.
We can advise you on such things as:
how you engage in the delivery of apprenticeships
who pays
how you pay
how money is collected
how the Levy funds may be used
how to use the new digital service for apprenticeships. We have set up a dedicated helpline if, once you have read the document, you still
have questions or concerns.
Call Lesley Martin on 01932 252599 or email at: [email protected].
We will also be inviting you to an open day / evening at our offices in Guildford in
November / December should you wish to discuss how this will impact on your
business over the coming months and years.
&
N&B Training is one of the premier Training Providers in the South East with a
97.5% success rate and a Grade 2 Ofsted report.
We were established in 1998 as a family run business specialising in childcare and
have grown to now offer apprenticeships up to level five, across five sectors, and
we are continuing to expand.
Our sectors are:
Children and Young Peoples Workforce
Generic - Business and Management
Health & Social Care
Hospitality
Supporting Teaching & Learning in Schools (STLS).
Unlike many providers, we understand that the relationship between the apprentice,
you the employer and ourselves is fundamental to apprenticeship success. This is
why we are proud to say that the majority of our apprentices come from repeat
business or recommendation. We work very hard to effectively maintain these
relationships.
We wholeheartedly believe in the benefits of education for everyone and as such,
strive to deliver the highest quality of training with the greatest of ease for all
involved. Our Ofsted grade confirms our continued commitment to excellence .
On a programme with us, your apprentice will be visited approximately every six
weeks but will also have ongoing access to feedback and support via our e -portfolio
system. This system is also continuously available to you, the employer, so you can
monitor progress easily.
Apprenticeship programmes last between a year to 18 months depending on level
and ability.
Have a look at our website for more information on apprenticeships, the
sectors we deliver and how to get in contact with us.
www.nandbtraining.com
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ABOUT US
& The Levy is a mandatory payroll tax on UK companies equating to 0.5% of your
annual pay bill.
Initially employers who have a payroll in excess of £3million per annum will be
paying the Levy, which will be collected via their PAYE process. However the Levy
on the first £3million is waived via a calculated allowance of £15,000. Anything over
and above £3million is levied in the following way:
Example 1:
Employer of 250 employees, each with a gross salary of £20,000.
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 - £15,000 = £10,000 annual Levy payment.
Example 2:
Employer of 100 employees, each with a gross salary of £20,000.
Paybill: 100 x £20,000 = £2,000,000
Levy sum: 0.5% x £2,000,000 = £10,000
Allowance: £10,000 - £15,000 = £0 annual Levy payment.
This payment is considered an investment in apprenticeship training, and therefore
a benefit to the company. Access to this levied money, which can only be used to
purchase apprenticeship training, will be via a new Digital Apprenticeship Service
(DAS) account. All employers will be given access to their own account within the
DAS.
Employers paying the Levy will benefit from a 10% top up from the Government into
their monthly account.
It is also important to note that any existing apprenticeships will continue on the
original funding agreement.
Employers will not be able to use the digital apprenticeship system to make
payments for apprenticeships started before 1 st May 2017.
All qualifications will fall within funding bands with a maximum amount payable per
qualification. Employers will negotiate prices with Training Providers within these
funding limits.
WHAT IS THE LEVY ?
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& Historically, small companies (i.e. those with less than 50 employees) have formed
a critical part of the employment of young apprentices (16 -18 years old). Therefore,
there will be no co-investment requirement for 16-18 year olds from companies with
less than 50 employees.
This also applies to 19-24 year olds with an EHCP (Education, Health & Care Plan)
issued by a local authority or a 19-24 year old care leaver.
Despite the Levy applying to larger companies (paybill over £3m), ALL employers
are effected by these changes. They will have to pay a compulsory contribution of
10% towards the training and assessment costs. These employers would negotiate
the overall cost of the apprenticeship in the same way as Levy -payers. The
Government then pays 90% of the agreed amount, the employers paying the
remaining 10%. The 10% will be invoiced by the Training Provider and paid directly
to them. The 90% will be paid to the Training Provider by the Government over the
life of the programme delivery.
Eventually all employers will be levied and will pay 0.5% of their wage bill to the
Apprenticeship Levy to ‘purchase’ training.
This co-investment also applies to Levy -paying employers where there is any
shortfall in their Levy payments.
All information about approved Training Providers, apprenticeships and costs will be
on the employers’ DAS (Digital Apprenticeship Service) account.
CO-INVESTMENT
EXCEPTIONS TO THE RULE
All employers will receive a payment of £1000 to help cover the costs of employing
and supporting 16-18 year olds.
16-18 YEAR OLD YOUNG APPRENTICES
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& ACCESSING YOUR FUNDS
There will be a new Digital Apprenticeship Service for all employers to access.
This will contain information about registered Training Providers and what they can
deliver so you can choose the right one for your business.
If your company pays the Levy, your financial account will be accessible, and this is
how you agree and pay the Training Provider.
If you are a co-investor, the Training Provider you choose via DAS will invoice you.
As a Levy-contributor, your new digital financial account is where you can see your
payments and from where your Training Provider is paid directly. The Levy ‘funds’
are visible the month following the payment, so for example, April’s funds will be
visible towards the end of May.
These accounts are to be readily accessible to enable you to monitor and make
payments as easily as possible.
The funds in your digital account will have an expiry date of 18 months. After this
date, they will be returned to the Government. This is to encourage companies to
use their Levy payments. To minimise expiring funds, the system will use a ‘first in,
first out’ method. For example, a June bill will be paid from an outstanding March
balance first (if available) as March’s funds would have a shorter ‘lifespan’.
It is understood that you will receive plenty of notice of any expiration dates.
The payments will be taken monthly in real time, meaning as your pay bill changes
each month, the Levy taken will reflect this. In reality these costs will therefore be
taken in any month where your pay bill is over £250,000. If your pay bill for the year
falls below £3million, any Levy deductions will be reimbursed.
D.A.S (DIGITAL APPRENTICESHIP SERVICE)
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& So far, we know the Levy is not to be used for the following:
wages
travel or subsidiary costs
licenses to practice
managerial costs
traineeships
programme set up costs.
From 2018, employers paying the Levy will also be able to transfer some or all of
their Levy pot to certain other employers on the digital system. This could be helpful
for those employers looking to fund training with an associate company or a
company within their supply chain or sector.
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FUNDING PARAMETERS
& Apprenticeships provide young people and employees with the opportunity to acquire
qualifications through work based training as opposed to university or college.
Apprentices form part of an employer’s workforce in the same way as any other
employee. There are numerous levels an apprentice can achieve (provided they
‘qualify’) but apprenticeships are available up to Level 6.
We currently offer apprenticeships up to a level 5.
Over the next three years, the Government is launching new apprenticeships called
New Standards.
These are based on standards designed by employers to meet their needs, the needs
of their sector(s) and the economy more widely. These standards are short, easy to
understand documents that describe the Knowledge, Skills and Behaviour (KSBs)
required to undertake a specific occupation well, and to operate confidently within a
sector. Standards focus on how an apprentice should demonstrate mastery of an
occupation and meet professional registration requirements in sectors.
Under the reformed programme, the knowledge and learning is very much led by the
day to day activities and requirements of both the apprentice and the employer within
the new employer-led Trailblazer standards being set out for the sector. This makes
apprenticeships both highly relevant per sector and flexible depending on
requirements.
University and college does not suit everyone so to be able to earn whilst you learn is
a great alternative for those who are keen to jump start their career having left school.
The Government incentives for employers who take on apprentices are also very
advantageous but being seen to recognise and champion having a skilled workforce
and investing in your staff is statistically one of the most appealing draws for someone
looking for an employer. Talk to us for more information about how you can benefit
from apprenticeships.
Levels 1 and 2 English and maths are compulsory for any apprenticeship as a
minimum standard so the government will continue to fund the cost of delivering
these qualifications as they already do.
ENGLISH & MATHS
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ABOUT APPRENTICESHIPS
& This transition will prove a great opportunity for you, the employer, to better control
the quality and content of your apprenticeships and it’s aim is to improve the
expertise of England’s workforce. That can only be a good thing for all businesses.
So how can N&B help support this exciting transition?
We will:
continue to support your business and staff development needs through
apprenticeship delivery
advise you on the New Standards, and which qualifications are appropriate for
your teams
help you access and manage your DAS account
maximise the use of your Levy payments to ensure value for money.
For the full updates and information from the Government please see the link below:
https://www.gov.uk/government/collections/apprenticeship -changes
CHANGE IS GOOD
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