Get on Board with the new Apprenticeship Levy

Get on Board with the new Apprenticeship Levy

In April this year the government made significant changes to our Apprenticeship system by introducing the Apprenticeship levy. Employers with a pay bill over £3 million pay a compulsory tax or ‘levy’ to support the development and delivery of Apprenticeships. The amount paid is 0.5% of the company’s pay bill and arrangements for paying the levy are managed on line through a digital system. Payments are collected monthly through pay-as-you-earn. The government will add to the amount you pay by providing a 10% top up to your levy funds.

Funds entering your account have to be spend within 24 months otherwise they will expire.

Employers are now in control

The introduction of the Apprenticeship reform now gives employers control of the funding pot; by opening a digital account through the online Apprenticeship Service, levy-paying employers can manage their funding for Apprenticeships, find out how much they have in their account and allocate money to their selected Apprenticeship provider/s.

For now, organisations who don’t fall within the requirements of the levy – known as non-levy paying employers – don’t use the digital account system, but this is planned to change next year. These employers pay 10% of the cost of an Apprenticeship with the government funding the other 90%.

Through the Digital Apprenticeship Service, levy-paying employers can access the Register of Apprenticeship Training Providers, select the provider they want to deliver their Apprenticeship training and negotiate the price for this delivery. There are limits though to the amount of funding that can be drawn down for each particular Apprenticeship – this is known as a funding cap. If the fee you negotiate with your selected training provider is more than the funding cap, you will have to pay the difference and if you run out of levy funds you are also likely to have to contribute extra.

An apprentice doesn’t have to be a new recruit; levy funds can be used for existing staff. The funds can only be used however to meet the cost of Apprenticeship training and not any other costs associated with this such as wages or travel.

Delivering Apprenticeships in house

You have the option either to buy-in your Apprenticeship training from an approved provider on the Register of Apprenticeship Training Providers, or provide it in house. If you choose the latter though, you do need to register as an approved provider and there are quality arrangements you must have in place to meet the requirements of the Skills Funding Agency (SFA) and Ofsted and you will be subject to Ofsted inspectin.

End-Point Assessment

One of the key changes to the Apprenticeship system is the introduction of Standards and an Assessment Plan for each Apprenticeship programme. Standards are being written for a wide range of professions and over 1500 have already been released – the standard for a particular Apprenticeship sets out the knowledge, skills and behaviours that the Apprentice must be able to evidence, and any specific qualifications they must achieve. It also determines a minimum duration for the Apprenticeship.

Another change is the introduction of end-point assessment; an independent assessment process which means that the training provider delivering the Apprenticeship will no longer be the one determining if the Apprentice has successfully completed the programme. Once the training provider, Apprentice and employer determine that the Apprentice has fully met the Standard and evidenced this (known as gateway) an independent end-point assessment organisation will follow the assessment plan for the standard to determine if they are satisfied that this is the case. When contracting with the training provider therefore, the employer also has to choose an EPA organisation. Funds to pay for this also come out of the employer’s digital Apprenticeship account.

cHRysos HR is an approved Apprenticeship training provider for the Level 3 Team Leader/Supervisor and Level 5 Operational/Department Manager Apprenticeships.

We are also approved as an End Point Assessment Organisation for both these standards.

For further details or to discuss anything in this article, please email us on or call +44 (0)1302 802128.

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cHRysos HR Solutions is a Doncaster based HR training and consultancy company providing CIPD accredited qualifications, Apprenticeships, Training and HR Services to SMEs nationwide. For more information about how cHRysos HR can help you or your teams successfully achieve further qualifications, contact us on or call +44 (0)1302 802128.