Apprenticeship Levy

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  • The current English system under which apprenticeships are funded partly by government and partly by employers will continue until 2017 when it will be replaced by funding on an ‘electronic voucher’ system, where the full cost of external training for apprentices will be met from funds held on a ‘use it or lose it’ basis in an employer’s electronic apprenticeship account.
  • To pay for this, an apprenticeship levy will apply across all sectors to all employers in the UK with a gross wage bill in excess of £3 million.
  • The levy will be set at 0.5% off an employer’s pay bill with an annual allowance of £15,000 (monthly £1,250) to offset against their levy payment (paid in vouchers). 
  • Employers will also receive a 10% top up to their monthly levy contributions for them to spend on apprenticeship training through their digital account.
  • The legislation governing the levy is contained in the Finance Act 2016. HMRC will be in charge of the rules on the levy, including assessment, payment and record keeping.
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