A survey conducted by Opinion Matters has concluded that millions of pounds are going unspent by businesses who pay the Apprenticeship Levy but don’t actually use the money. This is okay if you have money to burn or just see the apprenticeship levy as an additional tax, but, your business is losing out on the opportunity to use this to bring on fresh talent or use it to upskill existing staff.
Apprenticeship Levy Time Limit
There is a limit for the time you have to spend your Apprenticeship Levy. Essentially, any unused credit will expire 24 months after it arrives in your account. The government guidance on this is:
Funds that you don’t use will expire 24 months after they enter your account. Whenever a payment for training is taken from your account, the service always uses the funds that entered your account first. Your apprenticeship service account will let you know when funds are due to expire.
We know that many businesses are in the process of working our programmes to use their funding. We are working with employers to ensure that they put programmes in place that deliver new skills for staff but at the same time get a proper return on their investment by receiving high-quality provision.
It doesn’t matter if you pay into the Levy for a year but not implement programmes. What will need to happen is that the volume of delivery and the costs incurred in year 2 will need to match or exceed the amount paid into the Apprenticeship Levy over the first two years.
Understanding how to use the Apprenticeship Levy
We do advise not to rush into implementing new programmes but likewise do not leave it too late so that you avoid losing your payments. We wrote a while back about Apprenticeship Programme Planning. There needs to be a structured plan when implementing programmes. It should involve:
- Workforce Planning
- Action Plan
- Apprenticeship Programme Delivery Plan
Please speak to our team at Yorkshire Apprentice if you would like any help with delivering apprenticeships and funding.