What does the apprenticeship levy mean for your business?

Following the government’s announcement that the scheme will go ahead next year, are you clear on what the apprenticeship levy means for your business?

What is the apprenticeship levy? 

The levy is designed to fund 3 million places for apprentices, paid for by companies with a payroll of more than £3m and charged at a rate of 0.5% of their annual bill. The scheme will start in 6th April 2017, despite calls for a delay from business leaders due to economic uncertainty.

What does it mean for the telecoms industry? 

 

  • All companies with a wage bill of over £3m per annum will be required to pay the levy into a digital account which the government will top up by 10%.
  • Those with a lesser bill than £3m will not be required to pay, but can draw from the scheme.
  • Levy-paying employers will use money in their digital account to pay for apprenticeship training.  If they do not have enough money in their account, the government will ‘co-invest’ with the employer to cover the extra amount needed.
  • Non-levy paying employers will only be required to contribute 10% of the cost of training an apprentice. The government will cover the 90% of remaining training costs, and will also cover 90% of the extra amount if levy-paying customers do not have enough funds to cover all costs.
  • Small employers will not pay anything if they employ apprentices under the age of 19, and will receive a £1k payment with an additional £1k payment to the training provider.
  • Employers not using their levy fund within 18 months will lose it and the government will reclaim it.
  • The next funding guidance will be published in October 2016.

What does the ITP advise? 

Ann Potterton, CEO of the ITP comments: “Despite a mixed reception, and some resistance from key business groups, the long awaited apprenticeship levy will go ahead. We welcome a scheme which encourages more apprenticeships for young people. However, with only nine months until it comes into play, and only six months from guidance publication to set up, telecoms companies need to act now to make sure they are prepared.”

The ITP recommends:

  • Those with a wage bill of more than £3m access the government’s online calculator to work out how much they will need to pay. They will need to know the percentage of their workforce living in England, and the type of apprenticeship training they will need.
  • Ensure all payroll systems are set up to start paying the levy from April 2017.
  • Funding will be received via a digital government account which businesses will need to register with from January 2017.
  • All companies should start to look at recruiting apprentices either in-house or through an official scheme straight away.

Ann continues: “The ITP is the only organisation which specialises in telecoms apprenticeships, and our current scheme is still available until April. We are actively recruiting companies wanting to start apprenticeship schemes this autumn or next spring, and can help with the recruitment, funding and administration. We can also help businesses to understand what they will pay, what they are entitled to, and how to spend the levy or set up their own scheme to grow their own talent.”

For more information about the ITP’s apprenticeship scheme visit www.theitp.org

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