Apprenticeships funding – the new levy comes in force on 6 April

The government is changing the way it funds apprenticeships in England. The changes will take effect on 6 April 2017 and include the introduction of:

• the apprenticeship levy; and 
• the apprenticeship service (an online service that allows employers to choose and pay for apprenticeship training more easily)

A new 'co-investment' rate is also being introduced to support those employers who don't pay the levy. "Co-investment" is when employers and government share the cost of training and assessing apprentices.

You should note that apprenticeships are a devolved policy which means that authorities in England, Wales, Scotland and Northern Ireland each manage their own apprenticeship programmes – this includes managing how funding is spent on apprenticeship training.

You can find details of the scheme in the government's guidance which was updated on 31 March 2017. The key points are:

• The levy will introduce a requirement for some employers to contribute to a new apprenticeship levy.
• All employers operating in the UK with a pay bill over £3 million each year will have to invest in apprenticeships and must pay the apprenticeship levy from 6 April 2017. (There's a link below to government guidance on how to pay the apprenticeship levy).
• Employers with a duty to pay the levy will report and pay the levy to HMRC through the PAYE process.
• The principles on which apprenticeship funding is based will operate from 1 May 2017, (whether an employer pays the levy or not).

The levy will not affect the way employers fund training for apprentices who started an apprenticeship programme before 1 May 2017. Employers need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

Contact

To discuss apprenticeships, contact us on 0161 785 3500 or make an enquiry.

Further information

Government Guidance: Apprenticeship funding: how it will work (updated 30 March 2017)

How to pay the apprenticeship levy

The government's vision for apprenticeships

Apprenticeship standards: list of occupations available

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Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.