The new Apprenticeship Levy is good for business says Marie Harris of Beta Futures

From April 2017, the introduction of the Apprenticeship Levy and the new Apprenticeship Standards will give all employers the opportunity to develop career pathways for everyone in their business from recruitment to retirement. 

As we all know, one of the greatest assets of any business, irrespective of size, is its staff.  It is therefore crucial to ensure that staff are given the opportunity to hone existing skills or develop new ones so that they can evolve with the business, stay motivated and remain productive.

The Role of the Levy

In 2015, the Government announced plans to introduce a tax on large businesses in the form of an Apprenticeship Levy.  The purpose of the levy is quite clear; it is to fund more apprenticeships and to provide a degree of sustainability and simplicity in the funding system. This is good news for business and even better news for aspiring apprentices.

From April 2017, all UK employers with annual salary bills of more than £3 million will pay this levy.  The rate will be charged at 0.5% of the employer’s pay bill.  The Government estimates that only 2% of employers will be eligible to pay the levy and this could raise up to £3 billion a year by 2019-20.   Employers with a salary bill of less than £3m will not have to pay the levy, although they will need to make a financial contribution (equivalent to 10% of the apprenticeship cost).

What to Look Out For

Apprenticeship funding will now be based upon a system of set-price bands and will no longer be dependent on age.  It is anticipated that there will be 15 bands representing sectors and levels. For example, entry level customer service may be banded at, say £4,000, whereas a level 3 Welding band would have a value of say, £12,000.

The employer and training provider agree on a price for an apprentice’s training and assessment within the standards funding band.  For a non-Levy paying employer, the government will pay 90% of the total agreed price up to the set maximum for that funding band and the employer will pay the remaining 10%.  Levy paying employers will have all the costs paid by the Government.

Benefits

The Government’s new Apprenticeship Standards put employers firmly in the driving seat in terms of what training their new recruits undertake.  They mean that existing employees may have a clear pathway to progression within an organisation, as the restriction on age limits for funding and prior qualifications have been lifted.

Recruiting young people as apprentices can pay dividends.  Young people bring fresh ideas, enthusiasm and energy.  They can be your best ambassadors and will always remember that you were the one who gave them a start in their working life.

How Beta Futures Can Help

As with any government scheme there is a lot to take in and administer.   We know from the work that we have done that there will be plenty of businesses who won’t know where to begin. Beta Futures is here to help at www.betafutures.com

Marie Harris, Managing Director
Beta Futures Ltd.

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