From education to employment

Progress to Excellence Ltd leads employers through Apprenticeship Levy tunnel

Almost a year since the introduction of the Apprenticeship Levy, many employers are still in the dark about how the new system will affect them.

Recently released figures show that more than 20 per cent of employers in England have no idea about whether they need to pay the levy or not and just 55% of the 22,000 levy paying employers have registered their online account.

Since the introduction of the Apprenticeship Levy, Progress to Excellence Ltd has been at the forefront of relaying vital information to employers about how the levy applies to them. And, most importantly, the message to businesses is that apprenticeships are working with apprenticeship achievement rates increasing.

Damian Burdin, Chief Executive at Progress to Excellence Ltd, said:

“It is crucial that employers know how the levy works.

“Once they have all the right information at their fingertips, they can then make well-informed decisions about taking on new apprentices or training existing staff using apprenticeships.

“Indications that apprenticeship achievements are actually on the increase has been borne out by the fact that in 2016/17, 277,800 people completed an apprenticeship in England – the highest number since comparable records began in 2002.”

According to recent figures, the number of apprenticeship starts in England in the three months from August to October last year dropped by 30 per cent compared to a similar period in 2016. The Department for Education said the changes to how apprenticeships were funded were “likely to have impacted on starts”.

However, levy-payers had informed the government they were planning to increase the number of apprentices they employed in the future.

Damian Burdin added:

“There is a lot of confusion among employers about how the levy operates.

“The original estimate was that only about two per cent of UK employers would have to pay it. However, a survey of more than 1,000 employers undertaken by the Chartered Institute for Personnel and Development suggests that 22 per cent of them don’t know whether they have to pay it or not.”

Nearly half of employers surveyed (46 per cent) also thought that in order to claim the money back, they would be encouraged to “re-badge” existing training schemes as apprenticeships.

The Institute of Directors has also said many businesses did not understand how the new system worked and that one in 10 of their members wrote the levy off as a tax.

Apprenticeship Levy facts

  1. The Apprenticeship Levy was introduced in April 2017 to help fund people training at work. The government estimates the levy will raise £2.8b in 2018.
  2. UK employers with annual wage bills of over £3m, pay 0.5 per cent of their payroll into a central apprenticeships fund.
  3. Larger public and private sector companies can use this central apprenticeship fund – managed via their Digital Apprenticeship Service account – to fund the costs of training their new and existing staff.
  4. Companies with a wage bill of less than £3m pay 10 per cent of training costs directly to their training provider, with the government paying the remaining 90 per cent, up to a funding band maximum.
  5. The government provides all of the funding for training 16- to 18-year-old apprentices if a company has fewer than 50 employees.

For more information about the apprenticeship levy, employers can email Progress to Excellence Ltd or call them on 0151 650 6933.

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