Change in funding rules for Apprenticeships

Government set to change Apprenticeships funding rules

Next May there will be changes to the funding rules for Apprenticeships. The government will be expecting organisations especially larger ones to contribute an amount to a new apprenticeship levy. Any employers taking on an apprentice will also be expected to support their apprentice financially by contributing towards their apprenticeship training.

So what is the Apprenticeship Levy?

The new levy is a new payroll tax, this will only apply to organisations or businesses whose annualised payroll is over £3m. It will mean those organisations and business that it applies to will make an investment in apprenticeships. The money invested can only go towards the apprentice’s training, not towards their wages.

New changes for employers to make a contribution towards apprentice’s training

The new Government changes coming into effect next May will mean employers will have to pay a contribution towards an apprentice’s training. It is said the Government will pay the remainder. For many employers, this will mean an extra cost they will need to budget for. Employers will need to communicate with the apprentice’s approved training provider and agree on a price for both the delivering of the training aswell as any assessments at the end of the course.

For organisations or businesses who have fewer than 50 employees and employ apprenticeships aged 16-18 as well as 19-24-year-old care leavers will not have to pay a contribution to apprentice’s training, Government will wavier this contribution.

Further changes

• Allocate each apprentice a single funding band- this will be the same regardless of their age and where they live.

• Employers will need to communicate with a training provider to agree on a price for the training.

• Funding rates will range from 1,500 to 27,000