The apprenticeship levy is something that will become a common aspect of the workplace in the near future.
With uncertainty surrounding the post-Brexit result and the commonly discussed digital skills shortage, businesses are under increasing pressure to cement their organisational strategy to combat these challenges. However, the imminent arrival of the apprenticeship levy brings with it a plethora of opportunities.
What is the apprenticeship levy?
April 2017 will see the arrival of the apprenticeship levy. The apprenticeship levy is part of the government’s plan to increase the quantity and quality of apprenticeships. The levy or new tax aims to create millions of apprenticeships across the UK.
How does the apprenticeship levy work?
Employers with an annual wage bill of more than £3 million will be required to spend 0.5% of the total levy. Along with this, the government is also introducing a ‘levy allowance’ of £15,000 per year, which will be subtracted from the 0.5% total. The introduction of the apprenticeship levy will begin in April, while payments will be set up from May 2017. It will be the responsibility of the employer to inform HMRC each month as to whether they are eligible to pay.
Once employers have registered and paid the levy or tax, they will then be able to access funding through a digital apprenticeship service account. The service will initially be available to businesses who are paying the new tax, however, the intention is to give all employers access to the digital account by 2020.
Apprenticeship levy – helping to create a richer talent pool
The reasons in which young people choose their next role has become increasingly reliant on culture, training and progression opportunities. More than ever in recent years, school leavers are choosing to skip the traditional route of higher education and university and opting for the employment route that will offer them vital training, experience, and qualifications.
The introduction of the apprenticeship levy will revolutionise the UK’s future workforce by creating better training opportunities. They will also address shortages within a business, for example, the digital skills shortage.