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Important information for levy payers and non-levy payers

training in a different classAPPRENTICESHIPS

YOUR GUIDE TO THE FUNDING REFORMS

Apprenticeships in England are undergoing a dramatic transformation. The Government has introduced a series of reforms designed to meet the needs of employers, learners and providers.

The aim is to give employers greater control and flexibility so they can design a training programme that is directly relevant to their business.

As well as changing the way Apprenticeships are funded (with the introduction of a new Apprenticeship levy) the reforms also include a new type of qualification, with the current Apprenticeship Frameworks being replaced gradually by Apprenticeship Standards.

Skills Training UK is a leading independent Apprenticeships provider with a proven track record in offering employer-led, tailored Apprenticeships to large and small employers across all sectors.

We are committed to sharing our unrivalled knowledge and expertise to help our employer partners understand the Apprenticeship reforms.

Our dedicated team can offer advice and guidance every step of the way to help you identify the Apprenticeship opportunities that are right for your business – ensuring you receive maximum return on your investment.

If you would like to know more about how we can help your business please get in touch.

Skills Training UK – your partner through the Apprenticeship Reforms

What is the Apprenticeship levy?

From April 6th 2017, all employers in England with an annual wage bill greater than £3million must pay a 0.5% tax on payroll that they can spend on Apprenticeship training.

How much will you have to pay?

All firms will receive an allowance of £15,000 to offset against their payroll. This effectively means that employers with an annual pay bill of £3m or less pay no levy.

Example

An employer with a wage bill of £5million would pay a levy of £10,000.

Levy sum: 0.5% x £5,000,000 = £25,000

Subtract levy allowance: £25,000 – £15,000 = £10,000

How does the levy work?

The Apprenticeship levy is collected by HM Revenue and Customs every month through Pay as You Earn (PAYE). It can then be accessed by employers through the Digital Apprenticeship Service (DAS).

Employers use this online account to pay for Apprenticeship training. When the training starts, funds (in the form of vouchers) are taken from the account.

What can levy funds pay for?

Funds can only be used for Apprenticeship training and assessment. This must be with an approved training

provider and assessment organisation. They cannot be used to pay for other costs associated with Apprentices (such as wages or travel costs) or for other types of training.

Is there any extra support for levy payers?

Employers that pay the levy will receive an extra 10% every month from Government. This means that for every £1 that enters your digital account, you will get £1.10 to spend on Apprenticeship training.

How much will an Apprenticeship cost?

All existing Apprenticeship Frameworks and new Standards have been placed into one of 15 bands, with the upper limit of those bands ranging from £1,500 to £27,000. The upper limit of each band caps the maximum amount of digital funds an employer can use towards an individual Apprenticeship.

Costs are usually spread out over the length of the Apprenticeship.

How long do Apprenticeships last?

All Apprenticeships should have a minimum duration of 12 months, but many will take longer and the length will depend on the level and technical content of the training in question.

What age do Apprentices have to be?

Any age. You can offer Apprenticeships to new or current staff of all ages and at any level. Older staff, even those with degrees, can now follow an Apprenticeship if they are taking up new roles or require new knowledge and skills to perform their roles.

For more advice on Apprenticeships call Skills Training UK’s dedicated employer helpline on 0800 612 6224, email apprenticeships@skillstraininguk.com or visit www.skillstraininguk.com.

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What happens if you don’t spend all your levy money?

Funds paid into your digital account will expire after 24 months.

Can levy money be used to fund Apprenticeships for other employers?

In some cases, you may want to use your levy money to fund Apprenticeships at other organisations (for example employers in your supply chain). From 2018, you will be able to transfer 10% of your funds to another employer’s digital account.

What if you want to spend more than your levy?

The Government has agreed to provide support to help employers that want to spend more than their levy on Apprenticeship training. This ‘co-investment’ is similar to the arrangements for employers who don’t pay the levy (see opposite).

Are there incentives to employ Apprentices who need extra support?

The Government will pay employers an extra £1,000 for each 16-18-year-old they enroll on an Apprenticeship. Both levy paying and non-levy paying employers will receive this funding, irrespective of the size of company. It will be paid in two stages at three and 12 months.

The same payment will also be made to employers who take on Apprentices aged 19-24 with additional learning needs – for example those with an education or healthcare plan provided by the local authority or those who have been in local authority care.

They will also pay the full costs for any Level 1 and 2 English or Maths training required by your Apprentices (any age).

Non-levy paying employers and SMEsAs a non-levy payer, you will have an annual wage bill under £3million.

Although you won’t be paying into the new Apprenticeship levy or using the new Digital Apprenticeship Service until at least 2018, the way Apprenticeships are funded will still change for you.

What support is available?

The Government will ‘co-invest’ with employers that do not pay the levy. It will contribute 90% towards the overall cost of Apprenticeship training, with employers paying the remaining 10% direct to their chosen training provider.

The Government will also pay non-levy paying employers an extra £1,000 for each 16-18-year-old they enroll (paid in two stages at three and 12 months).

The same payment will also be made to employers who take on Apprentices aged 19-24 with additional learning needs – for example those with an education or healthcare plan provided by the local authority or those who have been in local authority care.

Extra help for small employers

Small employers (those with less than 50 employees) will not have to pay for training Apprentices aged 16-18 or those aged 19-24 with additional learning needs (as described above). The Government will contribute the full 100%.

Still unsure if you will have to pay the levy?

If you are an employer whose annual wage bill fluctuates between levy paying and non-levy paying then Skills Training UK can help.

Our dedicated team is offering one to one support for all employers to help make the process as easy as possible. Get in touch with us today if you would like to know more about the extra help available.

For more advice on Apprenticeships call Skills Training UK’s dedicated employer helpline on 0800 612 6224, email apprenticeships@skillstraininguk.com or visit www.skillstraininguk.com.

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training in a different classAPPRENTICESHIPS

YOUR PARTNER THROUGH THE REFORMS Apprenticeships – Frameworks vs Standards

The reforms also mean there is a new type of Apprenticeship qualification – with the existing Apprenticeship Frameworks being replaced over time by Apprenticeship Standards.

Groups of employers, large and small, known as Trailblazers, have been working together to design the new Standards which are closely aligned to occupational levels.

The Standards have placed employers in firm control – allowing them to say what core skills, knowledge and behaviours are needed for a specific role at a specific level.

Skills Training UK has been part of the Trailblazer process, working with some of our employer partners to help create Standards that deliver the expertise that both employers and learners need.

The key features and benefits of the new Apprenticeship Standards include:

l Developed by employers, for employers

l Industry and business recognised qualifications

l Active involvement of the employer during the Apprenticeship and in progress review meetings with Skills Training UK and the learner/s

l An independent End Point Assessment (EPA) to ensure all the required elements of the Apprenticeship Standard have been met

l Professional recognition – on completion of their Apprenticeship the employee becomes eligible for membership of the relevant professional body e.g. the Institute of Customer Service or British Institute of NDT

The End Point Assessment

The End Point Assessment will be delivered by an independent assessment organisation chosen by the employer from a Register of Apprentice Assessment Organisations (RoAAO).

The objective of the End Point Assessment is to demonstrate that the Apprentice can perform the job role specified by the Apprenticeship Standard in a fully competent, holistic and productive way.

This assessment will vary depending on the Apprenticeship Standard but could include:

l A portfolio of evidence

l An employer reference

l An interview

l A presentation

The assessor from the End Point Assessment body will then decide whether to award successful Apprentices with a pass, merit or distinction.

For more information on Apprenticeship Standards and what Skills Training can offer please see our leaflet on ‘Introducing the Apprenticeship Standards’.

Our support is flexible to each employer’s needs, adapting to fit in with shift patterns, working practices and different business or organisation environments.

To see how we can help your business, please get in touch today.

www.skillstraininguk.com