Demystifying the Apprenticeship levy
Myths about the apprenticeship levy still exist. And with 66% of apprenticeship levy-paying organisations finding the system too confusing, it is easy to see why.
What people miss is that the apprenticeship levy can be used for more than apprenticeships and new recruits. Join us as we delve a little deeper. Looking at how the levy can be accessed to upskill your existing staff, to help with diversity and inclusion, and even to help support managers.
The levy isn’t age-specific, it isn’t only for apprentices or new recruits, nor is it exclusively for large organisations...
Who can tap into the apprenticeship levy?
Any business can use the apprenticeship levy to fund training course for their staff. How much you spend on your monthly payroll will change how you can use it.
Why not use our Apprenticeship Levy Calculator to see how much you could access.
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, then you will be able to still access the levy training scheme but through an “incentive”. The levy would pay for 95% of training costs but you (as a business) would cover the other 5%.
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.
Use the levy to fill skills gaps by investing in your existing workforce.
As we move into 2020 and the "connective era" there are many businesses who will need skills which don’t currently exist in their workforce.
Redundancies and financial pressure, due to COVID19 and a turbulent market, means 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 very difficult time.
The apprenticeship levy can be used to help graduates hone their basic skills, but it can also send senior staff on level 5 and 6 courses. Equip your workforce with key 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 paying the levy since April 2017. Instead, make sure your money is working for you, rather than just sitting there.
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 a rate of around £120 million a month. However, this doesn’t mean the funding will disappear. More than £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. Which 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 apprenticeship levy can be used across every level of your business. It is a versatile tool and is not age dependant.
Many organisations are using the levy to fund training across mid-senior managers. It is an attractive option for onboarding and helping 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.
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.
Get in touch today to find out how this initiative can help you deliver on your people strategy, and help your existing team members do even better.