Apprenticeships Levy Consultation

The Government is consulting on its proposal to introduce an apprenticeship levy on larger employers. The levy is intended to help fund 3 million new, high quality apprenticeships.

The levy will apply to larger employers across the UK in all sectors. The size of employer will be calculated by reference to the total number of employees. The Government recognises that data on the number of employees is not currently provided through PAYE at employer level and so seeks views on how the size of the firm should be calculated. 

The Government proposes to calculate the levy on the basis of employee earnings and for it to be paid through the employer’s PAYE return to HMRC. Further details on the rate and scope of the levy will be announced as part of the Spending Review in the autumn.

Employers will use a digital voucher system to pay for the apprenticeship training they want. The Government will provide more detail in the autumn about how employers who are outside the scope of the levy can access apprenticeships funding. 

As skills training is a devolved policy, employers in England will be only be able to spend their vouchers on apprenticeships in England and only on training from registered providers. The levy can be used to pay for training for apprentices of 16 years of age plus. The Government seeks views on how the England operations of employers operating across the UK should be identified. 

The Government proposes that employers in England will be able to spend more than they contribute, with unused funding from other employers being redirected as a top-up. It seeks views on how long employers should have to use their funding before it expires and whether there should be a limit on the amount that any individual employer’s voucher account can be topped up.

As companies in the construction and engineering industries already pay a training levy, the Government seeks views on whether this should be continued, whilst at the same time paying the apprenticeship levy, or whether the training levy should be removed.

Responses to Apprenticeships Levy: Employer owned apprenticeships training, a consultation on the proposed introduction of the levy are required by 2 October 2015.