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Facts

Facts

Facts for levy paying employers

  • The levy takes effect from April 2017
  • The levy is paid by employers’ with a total wage bill in excess of £3m
  • The levy will be 0.5% tax of wage bill, paid through PAYE
  • Levy paying employers will benefit from a 10% top up of their levy funds each month
  • An allowance of £15,000 will be granted to offset against employers’ levy payments
  • The levy payments will be managed by the digital apprenticeship service (DAS)
  • Public sector bodies will also have the levy applied, and an additional target to ensure that 2.3% of its workforce is comprised of apprenticeships

Example

Employer of 250 employees, each with a gross salary of £20,000

  • Pay bill: 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
  • Government top up: £10,000 + 10% = £11,000 total available to spend on training

Facts for non-levy paying employers

  • Employers with pay bills under £3 million, and therefore not contributing to the levy, will not have access to the levy fund.Employers not paying the levy will be able to access government support for apprenticeships
  • The government propose a co-investment rate for apprenticeship funding. Non-levy paying employers will be required to pay 10% of the training costs with the government paying the remaining 90%
  • Small employers (less than 50 employees) may be exempt from paying for apprenticeship training and non-levy payers may also receive a further incentive of £1,000 for training apprentices: aged 16-18
  • 19-24-year-old care leaver
  • 19-24 years of age and has a Local Authority Education, Health and Care plan

Example

Employer of 100 employees, each with a gross salary of £20,000.

  • Pay bill: 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

Our team are perfectly placed to talk you through the changes to apprenticeships and answer any questions you have about the reform and how it impacts employers. It is our aim is to ensure that employers in the region make the most of these changes.

Call us today on 01642 777247 or email apprentice@cleveland.ac.uk

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