How will the apprenticeship levy affect SMEs?
How will the apprenticeship levy affect SMEs?
Posted on 25 Jul 2016
The Government's apprenticeship levy is scheduled to be introduced in April next year, affecting all businesses with a wage bill of more than £3m a year - but what will the impact be on small businesses?
The levy is in effect a tax set at 0.5% of a company's annual pay bill. Employers can then access the funds created through the levy using an online account and so invest in apprenticeship training. However, the levy cannot be used to pay apprentices' wages - it must be spent by the employer on relevant training.
Essentially, the levy is the Government's way of ensuring that big business plays its part in upskilling the population by formally training its workforce. However, it only applies to larger businesses, with a wage bill of more than £3million per year, which only accounts for less than 2% of UK employers. The average salary in the UK is £26,500, therefore those businesses with the same average salary will start to be affected by the levy when they have over 113 employees. This has led to questions over whether smaller companies which aren't contributing to the levy pot will continue to receive the funding they currently get from government.
Skills Minister Nick Boles has reassured SMEs that employers who aren't paying the levy will still have access to government support for their apprentices.
According to the government, any unspent levy money that a company has contributed but doesn't spend on training their own apprentices will be distributed more widely. It is anticipated this unspent money will filter down to smaller organizations to fund training for their apprentices.
Boles commented "We do not anticipate that all companies who pay levy will use up all of their money in their digital accounts and there will be a great deal more money to go around so we are absolutely determined that the level of apprenticeships provided by small and medium sized enterprises will continue as now."
However, it is widely acknowledged that at present there are many unanswered questions about how this will work in practice.
If you are interested in taking on an apprentice you can still access government funding.
Fully funded apprenticeships from ATG Training
Employers who have not taken on an apprentice in the last year may be eligible to receive a £1,500 grant.
Full
funding is available on cycle maintenance apprenticeships for 16-24
year olds and employer contributions are reduced for over 25s - so there
has never been a better time to take on an apprentice!
Apprenticeships benefit everyone. The apprentice gets valuable on the job training, employers get engaged, loyal staff and customers get professionally maintained bikes from qualified staff. Better yet, apprenticeships are largely delivered in your place of work, meaning little down time for your mechanics.
ATG Training offer an apprenticeship and an advanced apprenticeship.
Cycle Apprenticeship
Who is it for?
Anyone working as a mechanic who wants to gain training and qualifications to use during their working life.
What is included?
- Certificate of Cycle Maintenance (often referred to as a Technical Certificate, this is the specific, hands on training in Cycle Maintenance)
- Cytech Technical Two and wheel building training
- Level 2 NVQ Diploma in Engineering Maintenance & Installation - Cycles pathway
- Functional skills level 1 or 2.
- Employment Responsibilities and Rights
- Personal Learning & Thinking Skills
Advanced Cycle Apprenticeship
Who is it for?
Cycle mechanics that have completed the Apprenticeship and want to increase their skills, technical knowledge and obtain a high level qualification.
What is included?
- Diploma of Cycle Maintenance
- Cytech Technical Three training (3 courses)
- Level 3 NVQ Extended Diploma in Mechanical Manufacturing Engineering - Cycles pathway
- Functional skills at a minimum of level 2
To find out more about taking on a new apprentice or training an existing member of staff with ATG click here or contact ATG Training.