Any business with an annual payroll of more than £3 million is required to contribute a certain amount each month to the apprenticeship levy account.
This fund is then available to all businesses, whether they contribute or not, to help them find and train the right staff.
This is a great way for small businesses to train apprentices and build skills without having to spend a small fortune of their own income. This makes apprenticeships an even more appealing way to find the right kind of people to help your business grow. It also makes training them in the right skill set more cost-effective than ever.
For businesses that do contribute, you will pay 0.5% of payroll to the levy, with the government topping up this figure by a further 10%. This then gives you access to a larger fund with which to train apprenticeships. Any money from this fund that is not used to pay for the right kind of training is then returned to the Treasury after a couple of years.
Despite the apprenticeship levy funds being available for both contributing and non-contributing businesses, not all organisations are making the most of the opportunity. Very often this can just be a case of not fully realising what kind of access they have to the levy, or not being able to make more comprehensive use. Below you can find out more about how the apprenticeship levy is calculated and how you can make the most of it.
Unspent Levy Funding
Since being introduced in 2017, the levy has returned over £2 billion of apprenticeship funding to the Treasury. Unspent levy funds accounted for 23% of the Department for Education's ring-fenced apprenticeship budget from 2017 to 2021. What this means in practice is that there are funds available for businesses looking to make better use of the apprenticeship system but if it’s not used it will be reallocated elsewhere.
Hiring Fresh Apprentices
If your company's annual wage bill exceeds £3 million, 0.5% of your wage bill funds training with a further 10% top-up from the government. By training apprentices in specific vocational skills, you can enhance your workforce without incurring extra costs.
Access For Non-Levy Payers
Don’t forget that even if your business doesn't pay the apprenticeship levy, you can still benefit from apprenticeship funding. The government provides substantial support, covering 95% of costs, enabling businesses of all sizes to enhance their workforce through quality apprenticeships.
Strategic Workforce Planning Through Upskilling
It’s not just about finding new talent, you can also use the fund to help build on the resources you already have in place. Upskilling existing employees helps them to gain new knowledge and further develop their skills. In addition, employers who invest in upskilling are likely to retain their employees due to greater engagement and loyalty.
Identify Skill Gaps
The apprenticeship levy is a great incentive for identifying areas where you are lacking or where further skills could be of use. Conduct a thorough analysis of your company’s skill gaps and future needs and use the levy to fund apprenticeships that will address these issues and contribute to your strategic goals.
Conducting End-Point Assessments
Apprenticeship levy funds can be used to pay for endpoint assessments (EPA), which are used to evaluate what apprentices have learned throughout their training
Invest In Quality Training
Working with high-quality training providers like Quailitrain can help to develop programmes that are tailored to your business needs, ensuring that apprentices gain the skills that are most rewarding and beneficial.
Partner with Qualitrain to transform your levy into a strategic investment in talent and training. Get in touch to find out more about how to use the apprenticeship levy today!
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