Apprenticeships and Skills Minister Robert Halfon said: “We need to make sure people of all ages and backgrounds have a chance to get on in life. Apprenticeships give young people - especially those from disadvantaged backgrounds - a ladder of opportunity.”
If you’re an employer with an annual pay bill of more than £3 million, you’ll start paying the levy in May 2017. Once you have declared the levy to HMRC, you will be able to access funding for apprenticeships through a new digital apprenticeship service account. Separate arrangements will be in place in Scotland, Wales and Northern Ireland.
Businesses not eligible to pay the levy
Under the plans for the levy, the government has proposed that employers that are too small to pay the levy - around 98% of employers in England - will have 90% of the costs of training paid for by the government, reassuring millions of small businesses.
Extra support - worth £2,000 per trainee - will also be available for employers and training providers that take on 16 to 18 year old apprentices or young care leavers. Employers with fewer than 50 employees will also have 100% of training costs paid for by government if they take on these apprentices. This will help to ensure every young person, regardless of background or ability, has the chance to make their first step into work.
Other parts of the UK
The levy will apply to employers across the UK, however the digital apprenticeship service will only support the English apprenticeship system. Apprenticeships are a devolved policy, which means that authorities in each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training. Scotland, Wales and Northern Ireland have their own arrangements for supporting employers to access apprenticeships.
Will your business be subject to the apprenticeship levy? Is it an important step in addressing skills shortages or will it reduce the quality of training?