Take advantage of the lower employer contributions

In May 2017 there were significant policy changes regarding how apprenticeships were funded. Firstly, there was the apprenticeship levy. The apprenticeship levy is a tax on large corporations. Anyone with a payroll bill of over £3,000,000 had to put a small percentage of into their “apprenticeship levy pot”. This money was to be used exclusively for apprenticeship funding. The idea behind this scheme was to increase the rate of apprenticeships in large companies and any levy that was not used by the large companies within two years would then be transferred to be pay for apprentices with small and medium sized ones.

Another measure introduced was the employer contribution. The change meant that employers who did not hit the levy threshold (have a payroll of over £3,000,000), which was most businesses in the UK, would have to pay 10% of the training funds and the government would cover the additional 90%. This cost differed hugely depending on the apprenticeship that was being delivered.

This had been the state of play for the last two years; up until April 1^st 2019.

This April, the new major change to funding has been for the smaller business who do not contribute to the apprenticeship levy. Their contribution has now been halved to 5%, which is really good news. All non-levy employers now only pay half of what they had to before; meaning apprenticeships now make even more economical sense for businesses.

Unfortunately, this does only apply to apprenticeships that have started after April the 1^st 2019.

To find out more about funding for apprenticeships please visit the government website here.

Other Changes to employment.

Of course there are also changes to the national minimum wage and the national living wage. So from April the 1^st 2019;

Age 25+ – £8.21

Age 21 to 24 – £7.70

Age 18 to 20 – £ 6.15

Under 18 – £4.35

Apprentice minimum wage – £3.90

If you want to find out more about apprenticeships then lease visit our dedicated pages to employers and apprentices.