Apprenticeship Levy Transfers: Guide For Employers
What is the Apprenticeship Levy?
In 2017 the Government introduced a new Apprenticeship Levy. Employers with a wage bill of £3m or more pay 0.5% to HMRC which is then used to pay for the delivery of apprenticeship programmes in England.
The levy is designed to stimulate productivity growth in the UK through increasing training particularly in key skills to meet current and future demand. Experience shows apprenticeships also deliver higher productivity, stay for longer with their employer and have higher overall levels of satisfaction compared to those who have not undertaken an apprenticeship.
The large employers who pay the apprenticeship levy can use the fund for their own needs but can also allocate up to 25% of their levy fund to contribute to the cost of delivering apprenticeship programmes in smaller companies. This process is called Levy Transfer.
What is the Apprenticeship levy transfer?
Lloyds Banking Group is partnering with West Midlands Combined Authority to transfer unused elements of its levy to help SMEs train apprentices and help businesses increase their digital and manufacturing capabilities. Lloyds Banking Group is one of the first businesses in the UK to do this as part of its ongoing commitment of Helping Britain Prosper.
How can SME businesses benefit from the levy transfer?
Whilst many smaller employers have welcomed the value apprenticeships bring to skills development, the costs of the structured training and assessment that apprenticeships brings, has been seen as prohibitive for some. The Levy Transfer opens up the opportunity for smaller employers to reconsider present and future skills needed for their business to continue to be successful with a significantly lower financial contribution.
The Levy Transfer programme offers smaller employers;
- 100% of the apprenticeship training costs for each individual apprentice
- 100% of the assessment costs for each individual apprentice
- Opportunity to bring key skills and emerging knowledge to the business to meet current and future needs, contributing to succession planning
- Training Providers, Colleges and Universities across the West Midlands covering a broad range and complexity of skills
- Support from Apprenticeship providers through the process
What are the criteria to take advantage of Levy Transfers?
- Your business should be located within the West Midlands Combined Authority region and one of the seven constituent member authorities: Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton.
- Transferred Funds can only support new Apprenticeship starts. This can be either an existing employee or a new recruit to your business
- You can use the transferred funds to support Apprenticeships in STEM (Science, Technology, Engineering, Manufacturing and Digital) job roles
- The Apprenticeship will be at Level 3 and above and must be an Apprenticeship Standard (i.e. not a framework)
- The apprentice will be aged 19+ if less than 50 employees
- The apprentice will be aged 16+ if more than 50 employees
- Your business must be able to fund the position (Levy transfers cover training and assessment costs) and commit to the “off the job” training requirements for your chosen training scheme
- You’ll need to create an account on the Apprenticeship Service to receive the transferred funds and to pay for Apprenticeship training (Your Provider will help you to do this)
- You’ll need to sign an agreement with the Education and Skills Funding Agency
- You’ll need to take into account state aid rules when receiving funds. (Equates to 10% of funding)
How can I find out if I qualify and understand the next steps to take?
As an employer you are able to source a Training Provider/College/University of your choice. Please see below a link to ‘Find Apprenticeship Training’ from The Education and Skills Funding Agency.
Tell me more about apprenticeships
An Apprenticeship is a job with accompanying skills development programme. The job must have a productive purpose and should provide the apprentice with the opportunity to gain the knowledge, skills and behaviours needed to achieve the apprenticeship.
Throughout their Apprenticeship, apprentices will gain the technical knowledge and practical experience and wider skills they need for their immediate job and their future career. The apprentice gains this through a wide mix of learning in the workplace, formal off the job training and the opportunity to practise these new skills in a real work environment.
An apprentice must have their employment terms set out in writing and an apprenticeship agreement in place. They must be paid the rate for the job and their contract should be at least long enough for them to finish the apprenticeship.
As an apprentice they will;
- Work alongside experienced staff
- Gain job-specific skills
- Earn a wage and get holiday pay
- Get time for study related to the role (20% of their working hours – though this can often be taken flexibility to suit the learner and the business)
- Have a contract of employment and Apprenticeship Agreement
- Have the same rights and responsibilities as any other member of staff within the business
Apprenticeships take between 1 to 5 years to complete.
Click here to view the full Apprenticeship Levy Transfers: Employers Quick Guide
