Are you ready for the Apprenticeship Levy?

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Who we work with:

Are you ready for the Apprenticeship Levy?

Jo Preston-Taylor – Managing Director at BPP Leeds

BPP Alumni

Agenda

• What is the apprenticeship levy?

• How does the levy impact your business?

• How will the levy work?

• Strategic planning

• Next Steps

• Questions

BPP Alumni

What is the apprenticeship levy?

• From 5th April 2017, Employers with a paybill of £3m or over will be charged a levy of 0.5% of their paybill

• The paybill will be based upon your company’s total UK employee earnings that are subject to Class 1 secondary NIC contributions

• The levy will be payable through the PAYE system and will be payable monthly in real time

• The levy is ring-fenced in the form of an electronic voucher that can be used to purchase apprenticeship training

BPP Alumni

How does the levy impact your business?

BPP Alumni

How will the levy work?

BPP Alumni

Strategic Planning• Companies need to begin planning now to ensure the levy ties in with their

future people strategy

• Do not under-estimate the volume of apprenticeship training required if you intend to fully utilise your levy pot

• Think about EXISTING staff members as well as NEW HIRE roles

• Think about what your company currently spends on external training – can any of these programmes be converted into an eligible apprenticeship training programme?

• More guidance from Government expected in June 16 and October 16

BPP Alumni

Example• Company A employs 1,000 UK staff• 75% of staff are based in England• Payroll bill subject to the levy is

approximately £20m

£20m x 0.5% £1,000,000

English proportion (£1m x 75%) £750,000

Less: £15,000 government allowance (£15,000)

Total levy entering company’s digital account £735,000 Add: 10% government top up £73,500

Total annual levy pot £808,500

BPP Alumni

Example

If the company wanted to utilise all of their annual levy pot, the below table provides an example of how many apprenticeship programmes would need to be started:

Total annual levy pot £808,500 Average annual cost of a BPP Professional Apprenticeship programme £4,800Number of apprentices required 168

BPP Alumni

Next Steps….

Also consider:

• Updating your payroll software

• Consider a pilot apprenticeship scheme in September 16 if you do not currently take on apprentices

• Speak to your apprenticeship training provider to see how they can help you plan for the levy

joannapreston-taylor@bpp.com

Questions?