The Apprenticeship Levy is paid by employers with annual pay bills in excess of £3 million. The levy is payable at 0.5% of the total pay bill (i.e. not just the element over £3 million) minus an annual "levy allowance" of £15,000, although the total amount payable equates to exactly 0.5% of the element over £3 million.
The levy due by an employer is paid to HMRC through the pay-as-you-earn (PAYE) process alongside payment of Income Tax and National Insurance Contributions and is held in a 'digital fund' that an employer can use to pay for Apprenticeship training. A 10% contribution is added to each monthly payment.
Funds in the digital account remain available for 24 months from the date of payment. Any amount that remains unspent after that period will expire and will be reclaimed by HMRC, including the 10% contribution.
Payment from the digital fund is made directly to training providers each month, for as long as the Apprentice remains on the scheme (i.e. until the Apprenticeship is completed or the Apprentice leaves). Any Apprenticeship that is terminated less than 42 days after the start of the Apprenticeship will not qualify for any payment.
Employers are able to use their levy funds to provide Apprenticeship training to both existing employees and newly recruited Apprentices wanting to complete an Apprenticeship Standard.
How can Kent Training & Apprenticeships help?
Our team of experienced Partnership Managers are here to help advise you and your business, conduct a training needs analysis or help you get started with an Apprenticeship.