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Apprenticeship Levy

Levy Employers

In April 2017 the Government will introduce an apprenticeship levy to all employers charged at 0.5% of an employer’s pay bill, an HMRC allowance of £15,000 will be applied to all employers meaning only those with a payroll in excess of £3m will have a levy allocation which can only be spent on apprenticeships. The government will also apply a 10% top up to levy paying employer’s accounts ensuring employers can take out more than they out in. Levy contributions are made monthly and those not used expire after 24 months.


What counts as your pay bill?

Your pay bill will be based on the total amount of earnings subject to Class 1 secondary NICs. Although earnings below the secondary threshold are not counted when calculating an employer’s NICs, they will be included for the purposes of calculating the amount of levy the employer needs to pay.

Earnings include any remuneration or profit coming from employment, such as wages, bonuses, commissions, and pension contributions that you pay NICs on. We will not charge the levy on other payments such as benefits in kind, subject to Class 1A NICs.


How to calculate the levy, examples:
Example 1: Example 2:

Employer of 250 employees, each with a gross salary of £20,000

Pay bill:  250 x £20,000 = £5,000,000

Levy calculation: 0.5% x £5,000,000 = £25,000

Allowance adjustment: £25,000 - £15,000 = £10,000 annual levy payment

Employer of 100 employees, each with a gross salary of £20,000

Paybill: 100 x £20,000 = £2,000,000

Levy calculation: 0.5% x £2, 000, 00 = £10,000

Allowance adjustment: £10,000 - £15,000 = £0 annual levy payment

*NB. Employers who have multiple payrolls only have 1 £15k allowance, however the allowance can be shared between employers connected by ownership or control.

For more a more information on the employer guide to the levy click here.


Access to the Levy Pot

This levy pot will be put in the hands of employers through the new digital apprenticeship system which allow employers to manage their levy balance, select providers and manage their programme.


Non Levy Employers

For those employers who don’t pay the levy, funding will be available via MK College as it is now and some elements of the digital apprenticeship system will be available to assist with selection of apprentices and programmes.


Standards and Assessments

Although current apprenticeship frameworks are still available to ensure the apprenticeship market is fully employer designed and led apprenticeship standards and assessments are being introduced.

Apprenticeship standards are at occupation level, so are designed for specific job roles, they focus on the knowledge, skills and behaviours expected from an individual in the role, they are available from level 2 to level 7. Not all standards contain qualifications however MK College will work with employers and candidates to develop a personalised pathway including configurations of training, progress checking, observation, qualifications and mock assessments.

Apprenticeship assessments are delivered independently, they cannot be undertaken by the standard delivery partner. They are an end to end point assessment looking at skills, techniques, concepts and theories learnt through delivery of the standard. The assessment will judge if in the round the apprentice is competent in their role and apply a grade.

For information on the new standards please click here or see below for a quick guide.


Milton Keynes College have a team of Apprenticeship experts who can work with you to explain the apprenticeship changes, develop new programmes and assist with recruitment.

Contact us on: 01908 637056 or Apprenticeships@mkcollege.ac.uk




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