If you have a total salary bill of more than £3 million each year, you are required to pay a tax that equates to 0.5% of the total bill. This tax is called the Apprenticeship Levy.
The Levy is used to create a funding account. To cover the cost of apprenticeship training within your organisation; up to maximum amount of funds allocated. The bigger your pay bill, the larger you Levy account fund.
Each apprenticeship you undertake will be funded up to the funding band maximum for the apprenticeship standard as agreed by the government. You have 24 months to use the fund allocated each year.
As a Non- Levy payer, you would have a total salary bill of less than £3 million each year. However, this does not mean you cannot hire an apprentice.
Instead, you will share the cost through government- employer ‘co-investment’. You’ll only pay 5% towards the costs of the apprenticeship. The remaining 95% is paid for by the Government up to the funding band maximum.
Every apprenticeship standard has a funding band maximum. This is how much the government will pay for an apprenticeship. Different standards, have different band maximums depending on what the training involves.
If a training provider chooses to charge more for their apprenticeships than the funding band maximum, the employer is required to pay the difference.
All our apprenticeships are within the funding band maximum.
The apprenticeship incentive continues! Currently, employers can claim for a payment of £3,000 per an apprentice with an employment start date from the 1st of October 2021 to the 31st of March 2022. Applications for the apprenticeship incentive closes on the 20th of May 2022.
To claim the incentive, you must set up an apprenticeship service account.