AUTUMN 2015 STATEMENT: APPRENTICESHIP LEVY

With the confirmation of the ‘Apprenticeship Levy’ in George Osborne’s Autumn 2015 Statement and Spending Review effective by April 2017, 3aaa take a look at the impact and opportunities available to employers.

The ‘Apprenticeship Levy’ has been set at the rate of 0.5% of payroll with an annual exemption limit of £15,000 meaning that only if your payroll exceeds £3m per year will you pay the levy.

Therefore if your payroll is £12m per year, the introduction of the Apprenticeship levy will see a cost to your business £45,000 per annum.

Whilst some see this as an additional tax on the larger employers, there are ways in which you can take advantage of the scheme and increase your Apprenticeship programmes offered to employees.

With the introduction of more Apprenticeship Standards each month, employers are eligible for up to £10,800 of incentives payments through the Trailblazer standards whilst large employers are eligible for up to £8,100. As part of a Trailblazer, standard employers are required to contribute between £1,000 and £9,000 towards the cost of the Apprenticeship. Therefore, there are ways in which large employers can negate the impact of the Apprenticeship levy.

In the example above, if an employer was to recruit 10 Apprentices in the 16-18 age group and contribute towards the cost of the Apprenticeship delivery (£3,000 per apprentice), the incentive payments could offset the impact of the Levy.

Incentive received (10 apprentices 16-18) – £81,000
Cost of Apprenticeship (10 x £3,000) – (£30,000)
Levy  – (£45,000)
Net impact after levy (benefit) – £6,000

To find out more about the various Levy  options open to your business,  ranging from full managed service with an onsite Project Manager to remote Project Manager supported by a network of 40 Academies please contact Paul Brunskill paulbrunskill@3aaa.co.uk, Adam McEvoy-Robinson adammcevoy-robinson@3aaa.co.uk , Julian Jones julianjones@3aaa.co.uk  or visit www.apprenticeshipslevy.com

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