interviewing-for-an-apprentice

Apprenticeships are changing

Is Your Business Ready?

Apprenticeships are changing, in ways that will affect all businesses, large and small. Call our Business Development team on 01293 442200 (Press 4) or email employers@crawley.ac.uk to find out more about the changes and how we can help.

New Apprenticeship Standards
The current apprenticeship frameworks are being replaced by new standards, which have been designed by employers to address the relevant skills, behaviours and knowledge needed in specific roles.

End-Point Assessment
The new standards will be assessed at the end of the training period, by an assessor independent of both the employer and the training provider.

New Funding Model
Employers with an annual payroll above £3 million will pay 0.5% of their payroll into an Apprenticeship levy, to use to fund apprenticeships. For employers with a PAYE of less than £3 million, funding will be by co-investment, with the employer typically paying 10% of the cost of Apprenticeship training, and the government funding 90%.

For more information about the funding reforms visit gov.uk/government/publications/apprenticeship-levy-how-it-will-work

For more detailed information about the standards visit gov.uk/government/publications/apprenticeship-standards-ready-for-delivery

The Apprenticeship levy is a new payroll charge on UK employers to fund Apprenticeships. It is only payable on pay bills over £3 million.

How is the levy calculated?
The levy sum is 0.5% of the annual gross payroll, minus an allowance of £15,000.  

Employers with multiple PAYE schemes should add these together when making their levy calculations. Employers who are in connected ownership or control will share one levy allowance.

Example Levy Calculation for a £5 million payroll

  • Levy Sum: 0.5% x £5 million = £25000
  • Subtract the £15000 levy allowance: £25000 - £15000 = £10000
  • Levy Payment = £10000

You can estimate your levy payment at www.estimate-my-apprenticeship-funding.sfa.bis.gov.uk

How will the levy be paid?
The levy will be paid to HMRC through the PAYE process and placed in an apprenticeship service digital account. You can use this account to access funds and to track and plan your levy spend.

What is the top-up ?
The Government will apply a 10% top-up to the levy at the same time the funds enter your digital account. This means for every £1 that enters your digital account you get £1.10 to spend on Apprenticeship training.

Do I have to use my funds right away?
You will have 24 months to spend the money in your account, after which they will expire.

For detailed information on the levy visit https://www.gov.uk/guidance/pay-apprenticeship-levy

What can I use my levy credits for?
Levy credits can only be used for the training and assessment of Apprentices. The funds will be transferred from your apprenticeship service digital account to your chosen training provider.

You can use the levy funds to recruit new apprentices or to offer apprenticeships to existing staff (provided there is a need for them to develop new skills in order to progress in their career).

What if my training costs are higher than my levy payments?
Once you have spent your levy, you will revert to the co-investment model and pay 10% of the cost of apprenticeship training, while the government will provides the other 90% (up to the maximum amount of funding available for the chosen apprenticeship).  

Which apprenticeships are redeemable against the levy?
All standards and frameworks are redeemable against the levy.

For detailed information on the levy visit https://www.gov.uk/guidance/pay-apprenticeship-levy

My PAYE is under £3 million. What will I have to pay?
Employers with a payroll less than £3 million per year will not pay into the apprenticeship levy, but under the new funding model will probably pay a contribution towards the cost of their apprenticeship training.

The government will pay 90% of the total value of your apprenticeship training (up to the maximum funding band of the chosen apprenticeship) and the employer will pay the remaining 10%, plus any extra cost over that might be applied over the funding band.

The cost of all apprenticeships (whether new standards or existing frameworks) will be capped in the range of £1,500 to £27,000, and will vary depending on the subject area and level, and may be negotiable.

Small employer waiver for 16-18 year olds
Employers with fewer than 50 employees will not have to pay a contribution towards apprenticeship training for 16-18 year olds.

Apprenticeships started before May 2017
Apprentices who were accepted on to a programme before 1 May 2017 will be funded for the full duration of the Apprenticeship under the terms and conditions that were in place at the time the Apprenticeship started. You will not be able to use your levy funds against these.

Extra incentive for employing 16-18 year-olds and 19-24 year-olds with additional needs
There is an incentive of up to £1,000 available for taking on a 16-18 year old apprentice, or one aged 19-24 who has an Educational Health and Care Plan or who was formerly in care.

Funding for English and Maths training
Funding for English and Maths development aspects of apprenticeship training will be funded by the government.

If you are a levy payer, it is important you have a plan in place to make sure you make the most of your levy payments. Our Skills Advisers can help you create an apprenticeship training programme to maximise your investment.

If you don’t pay the levy, our team can advise on the best apprenticeship training options for your organisation.

Apprenticeships are proven to increase productivity, staff motivation and retention. As one of the largest Apprenticeship providers in the South East, Crawley College manages over 700 apprentices across a diverse range of industries.

Call us on 01293 442200 and PRESS 4, or email employers@crawley.ac.uk.