Evolve your business – Paying the Levy!
Paying the apprenticeship levy
Accessing your levy money using the apprenticeship service
Once you have declared the levy to HMRC, you will be able to access funding for apprenticeships through a new apprenticeship service account.
Preparing for the service
All levy-paying employers are now able to register for the service.
There are a few things you can do to prepare. When you register you will need:
- The Government Gateway login details for any PAYE schemes you want to include in your account
- Your Companies House number or charity number (if your organisation has one)
If your organisation is part of a group of connected companies or charities, you will also need to think about how you want to structure your account to manage your apprenticeships.
See our guidance on paying the levy for more information.
What the service will offer
Through the online apprenticeship service all employers will be able to:
- select an apprenticeship framework or standard
- choose the training provider or providers you want to deliver the training
- choose the organisation that will assess your apprentices
- post apprenticeship vacancies
You can also use the apprenticeship service to:
- set the price you’ve agreed with your training provider
- pay for apprenticeship training and assessment
- tell us to stop or pause payments if your apprentice stops or takes a break from their training, or you haven’t received the service you agreed with the provider
By 2020, all employers will be able to use the apprenticeship service to pay for training and assessment for apprenticeships.
Separate arrangements will be in place in Scotland, Wales and Northern Ireland.
Top-ups to the funds in your apprenticeship service account
We will apply a 10% top-up to the funds you have for spending on apprenticeship training in England. We will apply the top-up monthly at the same time the funds enter your apprenticeship service account.
That means for every £1 that enters your account to spend in England on apprenticeship training, you get £1.10.
Expiry of funds in your apprenticeship service account
Funds will expire 24 months after they enter your apprenticeship service account unless you spend them on apprenticeship training with a training provider. To help minimise the number of expired funds, money that entered your account first will automatically be used first.
Your apprenticeship service account will let you know in good time when any funds are due to expire so that you can arrange to spend them if you wish.
Directing funds in an apprenticeship service account to another employer
In the first year of the levy, you will be able to use the funds in your apprenticeship service account to pay for apprenticeship training and assessment for your own employees. The main aim of the apprenticeship levy is to support employers in growing the number and quality of apprenticeships in their own workforce.
We know that some employers will want to use funds in their account to pay for apprenticeship training of other employer’s apprentices, for example, someone in their supply chain. We are committed to allow levy-paying employers to transfer up to 10% of the annual value of funds entering their accounts to other employers or apprenticeship training agencies.
Pooling funds in an apprenticeship service account with other employers in a group structure
If you are in a group of companies connected for the purposes of paying the levy, your group will be able to collect their funds together into one account. Your group will do this by registering to have PAYE schemes attached to a single account. Since you can only use funds in your account to pay for apprenticeship training for your own employees, unconnected employers will not be able to pool funds in an account.
Buying apprenticeship training
Once you decide to buy apprenticeship training through the apprenticeship service, funds will be taken from your account each month to pay the training provider.
Choosing apprenticeship training
There are 2 different types of apprenticeship training you can choose from:
- apprenticeship standards – each standard covers a specific job role and sets out the core skills, knowledge and behaviours an apprentice will need to be fully competent in their job role and meet the needs of employers, standards are developed by employer groups known as ‘trailblazers’
- apprenticeship frameworks – a series of work-related vocational and professional qualifications, with workplace and classroom based training
The Government will phase out frameworks between now and 2020, as we move over to the employer-led apprenticeship standards.
Using funds in your apprenticeship service account to buy training
Monthly payments will be automatically taken from your account and sent to the provider following the commencement of the apprenticeship.
You need enough funds in your account to cover the monthly cost of each apprenticeship you have chosen. You will see funds entering your account each month as you pay the levy, and funds leaving the account each month as you pay for training.
Buying training if you don’t have enough in your apprenticeship service account – levy-paying employers
If you pay the levy, you may find that over the course of an apprenticeship the funds in your account aren’t enough to cover the full cost of the apprenticeship training and assessment you’d like to buy. This may be the case for employers who have a small levy payment or a variable pay bill from month to month.
If you don’t have enough in your account in a particular month, you will be asked to make a contribution to the extra cost of training directly to the provider. You will be able to spread this contribution over the lifetime of the apprenticeship and agree a payment schedule with us. The Government will provide some support to help you meet these additional costs, up to the maximum amount of funding available for that apprenticeship. This will be set at the same co-investment rate as for employers who do not pay the levy, with government paying 90% towards the extra cost of training and assessment and employers paying the remaining 10%.
Who provides the training?
You can only spend the funds in your apprenticeship service account or access government support for apprenticeship training delivered by an approved training provider like us.
Who provides assessment?
You can only spend the funds in your apprenticeship service account or access government support to pay for approved assessment organisations like us.
Full eligibility rules
A set of detailed rules exist to define what you can use apprenticeship funding for.
And to sum it up
Below you find a simple 6 step route map of how the Apprenticeship Levy will affect you:
Progress the spending of your Apprenticeship Levy or to book an appointment with one of our experts right now. Call or email us on:
02075651333 or firstname.lastname@example.org