The apprenticeship levy, new standards and other changes

May 18, 2017 4:28 pm

It’s been all over the news for a while now: new ways of funding apprenticeships, the apprenticeship levy and the new standards.  But what exactly does it all mean and how might it affect your business?  We picked up the following highlights at a breakfast meeting recently.

How does the levy work?

From April 2017 businesses with a payroll of more than £3m per year are liable for the 0.5% levy.  In essence, this is paid to the Revenue in monthly amounts, with an allowance of £15K netted off before the calculation.  Furthermore, on top of each company’s contribution, the government adds a further 10%.  It is this pot which is then used to finance that business’s apprenticeships.

Finance matters for non-levy companies

For those businesses that do not pay the levy, their financial contribution for apprentices is now 10% of the total fee.  It is important to note that these fees are not fixed, although they are capped, and therefore can be negotiated between a company and its training provider.  These fees then have to be paid quarterly by the company.  However, no financial contribution is required for 16-18 year old apprentices working in small companies at the moment.

It is also important to note that the current national AGE grant will cease to be after 31 July this year.  However, other financial inducements still exist for companies engaged with apprenticeships.   For example, no NI contributions are required for apprentices aged 25 or under.  In addition, under the new standards for every 16-18 year old apprentice, each company will receive £1K, regardless of the apprenticeship.  Of course, we are also continuing to offer our own apprenticeship grant, which is offered on a first-come, first-served basis.

New standards

The old apprenticeship frameworks will gradually become superseded by the new standards.  These standards are not only more comprehensive but they also require evidence of:

  • Knowing it – does the apprentice have the knowledge?
  • Showing it – does the apprentice evidence the competencies?  (signed off by the employer)
  • Being it – does the apprentice behave in the right way?

Other changes and considerations

Ensure that the training provider that you work with is registered on RoATP.  This is basically a Register of Apprentice Training Providers.  And only those registered are able to access funding.  Also through the government’s digital account service you can look at providers, what they do and their satisfaction scores.  So, remember to do your homework.  Not only that, but if you provide in-house training, you might be able to be recognised as an employer provider – and get paid for it.

Further information

It may be a good idea to talk to a local training provider to understand these changes and how they affect your business.  Some training providers will provide upfront advice and guidance totally free of charge.  They will also help you to advertise your apprenticeship opportunity for free.  To find out more about apprentices, visit the Gov.UK website.

Moreover, if you do have any skills and training needs, we’d like to hear from you.  Why not contact our dedicated employment and skills colleagues?  We’ll do our very best to help you and point you in the right direction.  To find out more, please contact Ella O’Connor on 01623 463327.

Gender pay gap reporting

Another recent change in legislation.  Gender pay reporting legislation now requires employers with 250 or more employees to publish statutory calculations every year.  In short, these calculations show how large the pay gap is between their male and female employees.  To find out more, the legal requirements and training available, visit the ACAS website.

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