Apprenticeship training takes aim at economic growth in the UK
No one wants to see another economic downturn and concerns are still fresh with regard to the impact Brexit will have on the economy. As a result, and in a very real effort to foster growth, the government has initiated a programme aimed at meeting the needs of a wide range of industries seeking to employ well-trained and knowledgeable staff.
However, as in anything the government does, this scheme is mired in legal jargon and stipulations which make it difficult to understand which businesses qualify for apprenticeship training and how to meet the levies imposed if your company does meet the requirements. Nevertheless, the bottom line is that the scheme is an effort to stimulate growth by building a highly-qualified workforce.
Look at This as an Investment in Your Company’s Future
Many businesses don’t understand the levy imposed and collected by HMRC. This tax became effective 6 April 2017, and as it’s just a year old, many companies still don’t understand what they should be paying it and what they can use the funding for. With that being said, and before looking at the levies collected, what your directors should understand is that the initiative is aimed at giving your company the tools it needs to be competitive in a global marketplace where technology is advancing at the speed of light – literally!
With an untrained, or undertrained, workforce, England has no hope of being competitive with countries that have already been promoting highly-skilled and trained workforces. The Apprenticeships Programme in the UK seeks to actively address this issue while helping to fund training for qualified businesses.
Each Country in the UK Has Its Own Apprenticeship Programme
England is mentioned here because each of the countries within the UK has their own regulations and methods of collection, and so the focus here is on England. Scotland, Wales, and Northern Ireland manage their own levies and apprenticeship programmes, so for brevity’s sake, this information is focused on England.
Therefore, once you understand whether you qualify and how much you are expected to pay in, you can find apprenticeship training providers authorised in England. The same would hold true for each of the other countries in the UK. If you are unclear as to where to find these apprenticeship training providers, per industry, check out the Apprenticeships by Find Courses website.
A Brief Look at the Apprenticeships Levy
Now, let’s look at what concerns UK businesses most, which is the actual amount of levy being imposed after which you can learn how to invest the funds you accrue. Of vital importance is the fact that the levy is imposed on any UK employer with a £3 million or greater payroll bill. These employers will be required to place 0.5 percent of their own payroll bill towards the Apprenticeships Levy.
Here is where it can get a bit tricky, so it is advised that you refer to the abovementioned website to find the estimate of your company’s funding. There is a thorough breakdown available to find your company’s commitment to the levy. In short, HMRC will collect the funds through the PAYE system and those funds will go into a fund for apprenticeships. Once you know how much you have available, you can begin your search for authorised apprenticeships training providers, all on the same site.
Top-ups and Allowances Explained
If you feel that you are being charged unfairly to provide training for your employees, get that notion out of your head. Not only is this tax money being redirected for an investment in your company’s economic future, but it is also topped-up by the government to the tune of 10 percent each month. For those companies not connected to other companies or charities, a £15,000 allowance is awarded to offset annual levies.
You are not alone investing in your company’s future. Government is topping-up to give you more funding to work with when seeking approved apprenticeships training for your employees.
Don’t Be Misled by the Term “Apprenticeships”
Since as far back as history records, there have been apprentices who were trained on-the-job. These were typically entry-level craftsmen from all trades seeking to learn a given profession. This is where so many employers get lost in the translation. Today’s apprenticeships initiative seeks to address training at all levels from entry to advanced degrees such as masters and doctorate degrees.
Also, understand that any training must be for a minimum duration of at least 12 months, and of that time, the apprentice must spend 20 percent on training which is classified as ‘off the job.’ All funds will expire in two years (24 months) if not used, so it behooves you to take advantage of building up a highly qualified and competent workforce. You’re paying the tax anyway, so you might as well use it!
How to Make the Most of Your Investment Levy
When recruiting new staff or advancing the training of currently employed individuals, the one thing you should understand is that you are investing in your company, so use the funds wisely. Take time to analyse areas of your company which could use a boost. Do you have departments or processes falling short of the mark? If so, that is where you should commit your funding.
Also, it is vital to know where and how you can spend the apprenticeships funds. Primarily, the funds are to be spent on approved apprenticeships training providers for the abovementioned purposes. You cannot use the levy for salaries, travel expenses, licences, placement programmes or for the cost of establishing an apprenticeships programme within your organisation. The levy is to be spent on training!
Summary in Brief
So, your key takeaway here is that this is not meant to be a heightened level of taxation but rather a redirection to help your company grow and prosper. In an age where technology is rapidly advancing, many industries are barely surviving with untrained or undertrained staff. Her Majesty’s government understands this and is aimed at giving your company a means to raise the level of quality and competency within your industry.
Each company that meets the requirements is charged a levy at a set rate and that funding is added to by government at a monthly rate unless otherwise stipulated. The money must be spent within 12 months on authorised apprenticeships training, which can be found on an industry by industry basis. You also must spend the funds only as agreed by government.
A Final Note on Apprenticeships Assessment and Training
Finally, there is one other important bit of information you should understand. For those companies with employees working outside of England a portion of the time, the apprentice must be working on English soil at least half of the time. There are funding bands per apprenticeship level and the money used cannot exceed that level.
As you can see, there is much involved in the Apprenticeships Training Programme but with proper guidance, you can make it work for you to build a more profitable venture. In an effort to grow the economy, the government recognises that businesses must first prosper. Use the funding wisely and watch your business grow exponentially. That’s the objective to keep in mind – growth. Once you have that, you understand the programme and how it can work to assuage fears over leaving the EU.