Apprentice advantage for employers
What is an apprenticeship, exactly?
As an apprentice, you’ll:
work alongside experienced staff
Apprentices can be new or current employees
Apprentices gain job-specific skills
Apprentices get paid at least the minimum wage
Why employers need an apprentice?
Training costs are funded
No hiring or recruitment fees
Get the right talent from day one
Boost your business productivity
Bridge skill gaps
Reimagine your business
Get additional eligible grants
Increase your bottom line
How to go about hiring an apprentice?
Hire an apprentice
Upskill existing workforce with or without levy
What is apprenticeship levy and how does it work for your business?
What is Apprenticeship levy?
When did the levy come in to effect?
Who can pay Apprenticeship levy?
Employers fall into one of two groups: levy payers and non-levy payers. Employers with a paybill of more than £3 million are required to pay the levy – whether they employ an apprentice or not. Your paybill includes all payments to employees that are subject to Class 1 secondary National Insurance Contributions, such as wages, bonuses and commission.
Example: (Levy Paying company with paybill of £5,000,000)
Levy Sum: £5,000,000 x 0.5% = £25,000
Levy Allowance: £15,000
Levy Payment: £25,000 – £15,000 = £10,000 (Payment due)
How will my company pay the Apprenticeship levy?
How does the £15000 allowance work?
For example, if your company only used £1000 of your levy allocation money in month A, alongside not paying the levy for that month, your allowance would also be £1,500 for month B.
How will levy be affected with connected group companies?
When a group of companies are connected, they can only use one £15,000 levy allowance. However, this allowance can be split towards all businesses in the group but this must be decided and notified to HMRC before the start of the tax year, it cannot also be changed for the rest of the tax year.
While paying levy, what advantages does it bring to my company?
A company that pays the levy will have access to the new digital account system. This will enable you to pay for training and assessment for Apprentices in England, provided as a voucher system. You are also able to search for training providers like Applied Business Academy to help deliver your Apprenticeship programme. You can register with this service here:
However, digital funds and government funding cannot be used for:
- Apprentice wages
- Apprentice travel and subsistence costs
- managerial costs
- work placement programmes
- the costs of setting up an Apprenticeship programme
Your company will have up to 24 months to spend these vouchers or they will otherwise expire and cannot be used again.
What is non-levy payer employers contribution costs?
Any Businesses with under 50 employees won’t need to pay for anything taking on a 16-18 year -old Apprentice, with the government contributing 100% towards the total cost of training.