Apprenticeship Levy 2017: Frequently Asked Questions

Our Apprenticeship Levy Management Team have been asked numerous questions since the announcement of the Levy back in Autumn 2015. We have put some of the most popular questions and answers below to help you get Levy ready.
Who will the Levy apply to?
The Levy will be calculated on 0.5% of the payroll bill of all employees across the whole of the UK including Scotland, Wales and NI. However, employers will not pay the first £15k of the Levy. Therefore, the payroll bill must be £3m before an employer starts paying. That does mean that employers with around 150 reasonably paid employees will pay the Apprenticeship Levy come April 2017.
When will employers pay?
The Apprenticeship Levy 2017 will start to be collected from April. It will be collected on a monthly basis, based on ‘live’ HMRC payroll data. It will include all directly employed employees but not contractors. It will be applied to ‘groups’ of companies but not franchisees. It will be HMRC that determines the rules and does the collection of the Levy.
How will the Levy work?
The employer will pay the tax and their ‘virtual’ account will be credited with that amount. They will then be able to pass their voucher to 3aaa Apprenticeships to draw that money down for the cost of the apprenticeship training.
The government has said that it will ‘top-up’ the funds by 10%. Therefore if a company pays £30,000 Levy they will have £33,000 in their virtual account to spend on Apprenticeship frameworks.
How much can be drawn down for each Apprentice?
Each Apprenticeship programme is allocated to a band of funding. We can advise you on the level of funding for the programme you select. Payments for English and maths and additional learner support will be separate payments made to the provider where necessary.
How will it work for the other nations?
Because the tax is collected by HMRC they have no way of separating out the payroll costs between the nations. The levy will be collected across the UK and a formula will be used to allocate the monies between the nations. The estimate is that £3bn will be collected across the UK and £2.5bn will apply to England. Employers will be able to spend the Levy for the employees who work in England. The nations will decide how to spend their allocations but we assume it will have to go towards funding apprenticeships. It may be a very different system from England.
Who can be trained under the Apprenticeship System?
Both existing employees and new recruits of any age, geographical location or prior attained qualifications will be eligible for an Apprenticeship. 3aaa Apprenticeships can help you understand how an Apprenticeship programme can meet your training needs.

Will there be any incentive to recruit 16 – 19 year olds?
There will be an incentive for the employers if they recruit a young person aged 16-19. This will be a minimum of £1000 and there will also be additional funding to pay for their training.
How will the system work for non-Levy payers?
Smaller employers that recruit 16-19 year olds will not have to make any contribution to the Apprentice’s training. Larger employers will contribute 10% of the cost of the Apprenticeship training. The government will contribute the rest of the cost (90%). The payments will be made directly to the training provider.
Which training providers will be able to deliver the training for employers?
In the Levy based system the government is supporting the concept of ‘registered’ training provider and, as such, are operating a register of providers. There is likely to be a set of criteria that providers must pass to be considered as a registered provider which will include Ofsted grade and track record. 3aaa Apprenticeships are a high-quality training provider with proven, successful methods of delivery developed over numerous years who are included on the Register of Providers.
What is 3aaa Apprenticeships’ view regarding an employer that already has a large contract
with another provider but would also like to engage a 3aaa Apprenticeships project manager?
3aaa Apprenticeships understand that some employers already have effective relationships with other training providers who deliver in different sectors. We would be happy to work with those other providers but we believe that employers should look at the totality of their delivery and our project managers can take that approach with you. The proposal for delivery can involve 3aaa Apprenticeships working with you to manage the totality of the provision or just the direct delivery of those areas where we specialise.
We currently have Apprentices working for us but what will happen from next year?
You can continue to employ Apprentices and the government will fund them under the current arrangements until the end of their programme. The new apprentices employed after May 2017 will be funded through the Levy payments. 3aaa Apprenticeships can explain how that transition can be managed effectively.
We already have an MIS system. Will one file link to the existing systems?
One File already operates alongside several different learning management systems. We will adopt a flexible approach to how One File is implemented and we will link to the existing systems where appropriate.
Once we have spent our Levy monies can we take on more Apprentices?
Yes, the government has announced that employers can employ as many Apprentices as they want but once the Levy pot has been spent they must contribute 10% of the total cost of delivery. In other words, the company will pay 10% and the Government will contribute the other 90% of the funding which will be drawn down by a registered training provider such as 3aaa Apprenticeships.
We currently employ Apprentices and 3aaa Apprenticeships provide all the recruitment support.
Will that continue?
Yes, we will continue to provide a full recruitment service to all our Levy customers. We will work with our employers to establish the recruitment specifications, the apprenticeship profiles and manage the complete recruitment process through to employment. For some of our current customers we are already running selection centres just for their vacancies.
Our company is part of a group of three companies. How will the levy work for us?
The HMRC has published rules that cover what they call ‘connected companies’. This is a technical definition which HMRC use for other elements of the National Insurance and Tax Systems. If your companies are ‘connected’ which involves analysis of the ownership structures, then you will be considered a single entity for Levy purposes and you will have a single Levy fund across all three companies. 3aaa Apprenticeships would be able to advise you on the likely approach taken by HMRC.
Can we link our company induction to the qualifications in the Apprenticeship?
Yes, we can integrate the induction with the start of the Apprenticeship programme and include any elements that the company wants. We can also use the One File system to track and monitor progress through the different elements of the induction.
Can we still claim money if someone leaves after a long period
of being on an apprenticeship programme?
Yes, the funding can be claimed monthly as someone progresses through a programme and this money does not have to be refunded if they leave. However, there will be an amount of funding held back which will only be paid if the apprentices get to the end of the programme. This is likely to be no more than 20% of the total funding.
There will be an administrative cost for employers of operating the programme.
Can the employer claim this back?
The Apprenticeship Levy can only be spent on delivering the training rather than any employment or administrative costs of the employer. However, 3aaa Apprenticeships will minimize the on cost for the employer and will link our monitoring systems into the existing systems of the employer. 3aaa Apprenticeships will reduce the need to establish any additional administration for the employers by offering a total management solution.
Can we take on some Apprentices before may 2017 as a pilot for the Levy?
Yes, many of our customers are looking to establish a pilot programme before May so that they are well established for when the Levy is introduced. Prior to May the government provides the funding for apprentices and 3aaa Apprenticeships can advise you on how those programmes can be introduced.
Can 3aaa Apprenticeships manage a programme where they do not currently have expertise such as hospitality?
We already have relationships established with several providers in specialist sectors such as hospitality and healthcare. We offer a fully managed service where we can draw down the funding for all apprentices and then work with those specialists. We can work with the employers to ensure this is managed as a single programme.