Helping Your Business Understand the Apprenticeship Levy

4 Minutes

Any business can use the apprenticeship levy to fund training courses for their staff, but 66% of organisations find the system confusing, we explain

Despite it being over five years since the apprenticeship levy was introduced, myths about the levy still exist. What people miss is that the apprenticeship levy can be used for more than apprenticeships and new recruits. So join us as we delve a little deeper and look at what the levy is and how it can be accessed to upskill your existing staff, overcome your hiring challenges, help with diversity and inclusion, and even help support managers.

What is the apprenticeship levy?

In April 2017, the UK government introduced the apprenticeship levy to have 3 million apprentices employed by 2020 and incentivise employers to take on apprentices to progress their businesses. Essentially the apprenticeship levy is a tax imposed by the government to contribute to apprenticeship funding for training programmes and courses spanning various industries.

At Pareto, we specifically cater to sales training, supporting businesses with their sales strategies and nurturing the industry's top sales professionals. 

Who can tap into the apprenticeship levy?

Everyone. Yes, you heard us correctly. Any business can use the apprenticeship levy to fund training courses for their staff. However, how much you spend on your monthly payroll will change how you can use it. If you pay over £3 million on payroll, you will have been paying a 0.5% levy. For you, the levy pot will cover the entire cost of any staff training.

If your payroll is less than £3 million, you will still be able to access the levy training scheme through an "incentive". The levy would pay for 95% of training costs, but you (as a business) would cover the other 5%. The levy is paid through PAYE monthly, and employers have the opportunity to declare the funding at the start of the financial year. The levy allows for up to £15,000 support, which can only be used on apprenticeship courses and end-point assessments. 

Why not use our Apprenticeship Levy Calculator to see how much you could access?

What courses can the apprenticeship levy cover?

One of the major misconceptions is that the levy can only fund apprenticeship-level courses. In reality, it can pay for training at any level. As we move into 2020 and the "connective era", many businesses will need skills that don't currently exist in their workforce.

Due to COVID-19 and a turbulent market, redundancies and financial pressure mean outsourcing these skill sets isn't an option. So why not use the apprenticeship levy to help lift some of that pressure?

While also giving your existing staff access to training, support and help during a challenging time.

The apprenticeship levy can help graduates hone their basic skills and send senior staff on level 5 and 6 courses. Equip your workforce with essential leadership skills, or use the levy to pay for extra qualifications. The apprenticeship levy can be used in so many ways. If you're looking to access your levy pot, you can send your staff on our courses via contributions you made months ago. There's no need to pay additional funding into the levy pot if you've been spending the levy since April 2017. Instead, ensure your money works for you rather than just sitting there.

At Pareto, we provide top companies with the opportunity to utilise the levy with our sales and leadership training programmes. We will be your business's growth partner, bolstering the sales skills of your existing sales team and introducing you to the best young sales reps on the market. In addition, our range of sales coaching courses gives apprentices the time to improve their sales performance and become future sales leaders.   

Some of the apprenticeship courses we offer:

  • Level 3 IT Technical Sales
  • Level 3 Team Leader
  • Level 3 Information Communication Technician
  • Level 4 Sales Executive
  • Level 5 Operational Manager

Use the levy to fill skills gaps by investing in your existing workforce.

Does the apprenticeship levy fund expire?

Yes, but as a 24-month rolling expiration or 2-year rolling pot. As of April 2019, the Department of Education began absorbing the levy at around £120 million a month. However, this doesn't mean the funding will disappear. Over £3 billion has remained untouched, as organisations utilise only 14% of the available funds.

Currently, only 19% of levy-paying employers have accessed the funding. Unfortunately, this means four out of five contributors aren't getting the most from their money. The government has spent time reviewing the system to make it more user-friendly. It's now hoped companies will begin upskilling and training their staff via the levy.

Do you have to be 16 to be eligible for the apprenticeship levy?

The levy isn't age-specific; it isn't only for apprentices or recruits, nor is it exclusively for large organisations. Ultimately, the apprenticeship levy can be used across every business level. It is a versatile tool and is not age dependent. Many organisations are using the levy to fund training across mid-senior managers. It is an attractive option for onboarding, helping to keep people's development at the forefront of your business even when your usual funds are lacking.

The apprenticeship levy can be used to deliver a broad range of results for many different issues.  

  • Hiring young talent
  • Overcoming an internal skills shortage
  • Upskilling existing staff
  • Improves productivity 
  • Increases employee retention

At Pareto, we want to help you release the potential of your apprenticeship levy. It is a versatile tool, and our team are here to help you get the most out of it. Explore our apprenticeship courses and discover how your business can benefit from apprenticeships. 

If you require more information, get in touch today to find out how the apprenticeship levy initiative can help you deliver your people strategy and help your existing team members do even better. 

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