Will I be affected by the Apprenticeship levy?
A recent employer poll by City and Guilds has highlighted a staggering number of potential Levy paying employers who still do not know anything about it.
The City and Guilds skills group asked 500 senior decision makers from a varied group of organisations about the impact these changes would have on their businesses and their recruitment strategies going forwards.
The results of this poll are outlined below:
- Only 33% felt fully informed about the new rules
- 28% were not sure whether it would affect their business
- Only 31% said they would hire more apprentices because of the levy
- Only 15% said they would have to cut other recruitment schemes to pay it
- 1/3rd of potential levy payers are unaware of the Levy at all.
The survey also showed 87% of employers were struggling to fill vacancies, with 29% agreeing this was true of apprenticeship places as well as traditional vacancies.
Overall, 47% felt the levy was a good way to get employers to pay for training, 43% said it gave them more control and 34% believed it would improve quality.
With 1/3rd of potential Levy payers not even aware of this new development in apprenticeships and skills funding. It is vital that we at Baltic Training do what we can to inform and educate those we work with to ensure that everybody who may be paying into the levy understand why and how, and the benefits this will have on business going forward.
So, what is the Apprenticeship Levy?
From April, employers with a wage bill o more than £3mil we will be required to put 0.5% of their annual payroll into a designated pot to fund apprenticeship training. The aim is to double spending on apprentices in England, resulting in three million new apprenticeships by 2020. From May, employers will be able to withdraw funds using their online account to fund apprentices. The registration for online accounts is now open and you can read more about this here.
What about employers who do not pay over £3mil?
When it comes to the levy, there are three categories that all employers will fit within;
| Category 1 - | A business with less than 50 employees and a salary bill of under £3mil. |
These employers will not have to pay into the levy, and all training for,16-18 year olds will be fully funded by the government. Employers will be,able to upskill existing employees, including graduates and the government,will provide 90% of the funding, with the employer only contributing 10%.
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| Category 2 - | A business with more than 50 employees and a salary bill of under £3mil. |
For these employers, the government will contribute 90% of the,apprenticeship funding, with the employer only having to contribute the,remaining 10%.
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| Category 3 - | A business with a salary bill of over £3mil. |
| These employers will contribute 0.5% of their pay bill over £3mill,,and these funds will be accessed via their digital account. For all funds,within the digital account, the government will top this up by 10%. This,means for every £1 contributed by the employer, there will be £1.10 to spend,on training. If an employer uses all of the money in their levy fund, they,will become category 2 with the,government providing 90% of the funding for any additional training until,they build up more funds in their levy pot. |
For more information on the Levy and to see how this will affect you, you can call Baltic Training on 01325731050 or email us at yourfuture@baltictraining.com
Stats taken from recent report by City and Guilds.