Apprenticeship Levy

From April 2017, all UK employers with annual gross wage bills of more than £3m will have to pay an apprenticeship levy.

The levy is aimed at funding an increased uptake of apprenticeships. The rate of the levy will be 0.5% of the employer’s annual wage bill.

The UK Government expects to raise up to £3bn per year by 2019/20.

The levy will be calculated as 0.5% of the employer’s gross annual wages bill but there will be a £15,000 per annum allowance to offset against the levy which is why only employers with wage bills over £3m will have to pay. It will be collected along with the normal monthly PAYE payments of the business.

The existing CITB and ECITB levies will also continue to operate as before.

The Scottish Government has set a target of producing 30,000 Modern Apprenticeships per annum by 2020 and they are in consultation with various bodies to work out how best to spend the levy to achieve this target. Employers who pay the levy will be invited to have a say in the apprentice training programme to allow them a chance to get more direct benefit from it but all employers, large and small, will be able to access funding for their approved apprenticeships.

The exact details of the apprenticeship training courses have not yet been finalised and there are ongoing consultations between the Scottish Government and training bodies to finalise the details of how the levy will be used. More details will emerge over the coming months.

Mark McColgan from EQ Accountants LLP commented “the Apprenticeship Levy is coming in very soon but there is very little detail on how exactly the system will work and how it will be administered in Scotland. Small businesses should be encouraged to apply for funding from the levy to help to finance their staff training”