Will the Apprenticeship Levy cost your business?
Basic answer is YES, if your annual wage cost is £3m or more!
The Government has set a target to see 3 million apprentices by 2020. To achieve this George Osbourne has confirmed the introduction of a fundamental change to the way Apprenticeships in England are funded, by the introduction of an Apprenticeship Levy, from April 2017.
The basic charge is 0.5% of your PAYE bill. However, companies can claim £15,000 training allowance to offset this, which means that Employers with an annual pay bill of over £3m, will pay the levy.
The levy payment will then be ring-fenced in the form of an electronic voucher that can be used to purchase apprenticeship training.
The levy is the government’s logical solution to funding the increase in numbers and committing employers to take on apprentices.
Example Company 1. Employs 100 people, each earning £20,000
Wage cost: 100 x £20,000 = £2,000, 000
Levy: 0.5% of £2,000,000 = £10,000
Allowance: £10,000 - £15,000 allowance - £0 annual Levy payment
Example Company 2. Employs 200 people, each earning £20,000
Wage cost: 200 x £20,000 = £4,000, 000
Levy: 0.5% of £4,000,000 = £20,000
Allowance: £20,000 - £15,000 allowance - £5,000 annual Levy payment
If you would like support on employing Apprentices for your business, get in touch!





