Wiser

We’re a creative & recruitment company with a vision to change the way people think about work. We transform employer brands for our clients, covering every touchpoint from EVPs to attraction campaigns, events, onboarding and internal comms.

London, United Kingdom
Founded: 2013
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employer branding
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Fidelity
Lloyd's of London
Just Eat
Kraft Heinz
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Travelex
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UBS

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Branding
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Apprenticeship Levy - Everything you Need to Know

by Jessica Sinclair

The levy

The levy is one of the great mysteries of apprenticeships, and, for many, a lack of understanding causes employers to feel nervous and unsure about setting up their own programme. According to a CIPD survey, 22% of employers don’t actually know whether they have to pay the levy or not. Introduced in 2017, this government tax aims to increase the number of apprenticeships on offer in the UK. The levy can be used to fund the training and assessment of apprentices working in England.

The levy affects businesses with a payroll of over £3 million per annum and aims to fund three million new apprenticeships in England by 2020.

Your other option

If you do not pay the levy, then you will only be required to pay 10% fo the total cost of the apprenticeship and the government will cover the remaining 90%. The only exception to this is if you are an employer with fewer than 50 members of staff and your apprentice is age 18 or below: in this case the government will cover 100% of the cost. If you do take on apprentices (whether they are funded through a levy or not) you may also be eligible to receive incentive payments.

You will receive a £1,000 additional payment if you take on an apprentice who is:

  • 16 - 18 years old
  • 19 - 24 years old and has previously been in care or had a Local Authority Education, Health and Care plan

Key Facts

  • The levy is charged at 0.5% of a business' UK payroll and is paid monthly through PAYE
  • All businesses receive a £15,000 allowance that they can offset against their levy amount
  • The levy taken is a split across the devolved nations (England, Ireland, Scotland and Wales) based upon the % of employees living in each country
  • The 'English percentage' is paid into the employer's Apprenticeship Service Account and is topped up by 10%
  • Employers can access this money to spend on apprenticeship training and assessment with approved apprenticeship providers
  • Employers are not allowed to go 'into the red' and funds will expire after 24 months
  • The first funds will expire in April 2019. These will be the funds that were taken from March 2017's payroll

Who pays it?

An employer who would pay the levy: An employer with an annual pay bill of £5 million: Levy sum: 0.5% x £5,000,000 = £25,000 Allowance: £25,000 - 15,000 = £10,000 annual payment

An employer who would not pay the levy: An employer with an annual pay bill of £2 million: Levy sum: 0.5% x £2,000,000 = £10,000 Allowance: £10,000 - £15,000 = £0 annual payment