The Apprenticeship Levy
The Apprenticeship Levy
My name’s Mike Thompson, I’m a director for apprenticeships at Barclays. I’ve worked for Barclays for the past 27 years and for the past 7 I’ve been in my current role.
The Apprenticeship Levy is a tax that’s being introduced by the UK government, that will come into force in April 2017. It’s on every company that has a payroll of over £3million a year, and it is half a percent of your payroll. And the levy itself will be used to pay for apprenticeships, so companies will be able to spend it on apprenticeships for their own organisation.
Employers will pay the levy on a monthly basis through their PAYE. So HMRC will take the funds each month and it’s based on the number of employees that company employs at that particular time. The money will then be placed into a digital apprenticeship service pot, if you like, and the company will then be able to access that pot and spend it with registered training providers to deliver their apprenticeships .
I guess most people will consider the eligibility of the apprenticeship programme being 16-24 year olds, because that’s what it’s always been historically, but actually the rules have changed a lot recently. There’s no longer any age cap on being an apprentice, which means that if you have people in your workforce who, for whatever reason, their job has changed and they need to learn new skills, they are suitable for an apprenticeship as a 19 year old joining your organisation and just starting out in their career.
Companies have to consider a number of things. Do they spend their levy on new recruits and bring in some new apprentices and new skills into their organisation? But equally they could consider spending it on their existing staff, so apprenticeships can be
Delivered to people already in jobs, as long as they are learning new skills or developing.
So, I think one of the key questions a company has to ask is how much have I got to spend and how do I do it?
The top 3 things to consider when you’re setting up an apprenticeship programme, the most important is what are the skills you need in the organisation in the future and build a programme that meets those needs. I think the second most important thing is to think about what type of talent you want in your business and how diverse an organisation you want to have.
Apprenticeships are a great way of bringing in a very rich, broad, diverse talent set. And then the third most important thing is to pick the right training partners to work with you.
It’s key that you work with people who understand your business, and can deliver training and skills that meet your business needs, and give you what you need as an organisation.
One piece of advice I’d give to any business that’s paying the levy is to consider it as an investment and not a tax. It’s a chance to invest in the long-term health of your business and your workforce. Grab hold of it and take it.