We have had a number of enquiries from businesses about Apprenticeship Levy Government Co-Investment and we thought it would be useful to try and explain how this works.
Apprenticeship Levy employers are now clear about their contribution. If you are an employer with a pay bill of over £3 million each year you will have been paying the Levy since 6th April 2017. You will be paying this through your PAYE process. The Levy is charged at 0.5% of your wage bill. We have created a useful calculator to help work out how much your Apprenticeship Levy Payment should be.
Using your Apprenticeship Levy funds?
By now you should have some funds in your apprenticeship Levy and like many other businesses you will be trying to figure out how to actually use it. We would recommend that in the first instance you talk to our advisors at Yorkshire Apprentice who are on hand to offer free advice and guidance. The funds in your account can be used on any apprenticeship programme for new or existing staff. Once you have implemented programmes into your business your funds will be used to pay for delivery.
Apprenticeship Levy Co-Investment
The Apprenticeship Levy Co-Investment is the area of funding that is causing some confusion or is not actually known about so let us try to explain………
In essence, if you have introduced programmes and the cost of which exceeds the funds in your account in a particular month, you will share the remaining cost of training and assessing for that month with the government. This is ‘co-investment’. You will pay 10% of the outstanding balance for that month, and the government will pay the remaining 90% up to the funding band maximum.
Apprenticeship Levy Co-Investment Example
In this example, we will assume the business has an annual payroll of £6 million and all of their staff work in England. The business is interested in running programmes for new and existing staff in:
- Level 3 Business Administration – 18 month programme (4 new apprentices)
- Level 3 Team Leader / Supervisor – 12 month programme (12 existing staff)
- Level 3 Digital Marketer – 18 month programme (1 new apprentice & 1 existing staff)
- Level 2 Customer Service 12 month programme (6 new apprentices)
All of the programmes will start in Oct 2017
Your levy is 0.5% of your gross annual payroll, less a £15,000 allowance. The balance is then divided by 12 and rounded down to the nearest pound. This gives a monthly levy payment of £1,250 (rounded down).
100% of your pay bill goes to employees in England, so £1,250 is multiplied by 100%. The government tops that up by 10%, which gives you £1,375 (rounded up) to spend each month.
In this model, the amount of funding in your Levy account does not cover the costs of the training so the government will co-invest with you. This means the government will pay 90% of the training costs that are not covered by your levy credit and you contribute the rest.
Your monthly funding breakdown
|Date||Levy credit||Cost of training||Your share (10%)||Government share (90%)||Balance|
If you would like further information about the Apprenticeship Levy and more specifically co-investment then please contact the team at Yorkshire Apprentice and we will be delighted to help.