GOVERNMENT ANNOUNCES CHANGES TO APPRENTICESHIP FUNDING
The announcement outlines a promise to invest £60m into apprenticeships with the hopes that it will boost apprenticeship numbers for young people and SME’s and support the demand for apprentices from employers…
On Monday 18th March, the Government announced changes to funding for apprenticeships, including the apprenticeship levy.
FUNDING FOR SME’S AND YOUNG PEOPLE
The announcement outlines a promise to invest £60m into apprenticeships with the hopes that it will boost apprenticeship numbers for young people and SME’s and support the demand for apprentices from employers.
From the 1st April 2024, the 5% co-investment charge for apprentices under the age of 22 years old will be removed. Previously, employers were required to cover 5% of an apprentice’s training costs. This change ensures that small employers hiring apprentices aged 16-21 will have the entire cost of training covered, aiming to alleviate the financial and administrative burdens associated with the 5% charge for both employers and providers.
SME’s play a key role in the economy and in providing employment and training opportunities for young people leaving school and entering the workforce. The hope is that by boosting apprenticeships in young people, this funding will strengthen the long-term skills pipeline of the labour force.
DOUBLING THE LEVY TRANSFER ALLOWANCE
The Apprenticeship Levy means that employers who have a pay bill of over £3m, pay monthly into their Apprenticeship Levy Account. They can then gift a portion of this to other employers to pay 100% of the training costs of an apprenticeship. After two years, unused funds are returned to the Government.
From April 2024, the amount that levy paying employers can gift to other employers will double from 25% to 50%. This means that levy payers can increase their financial support for other employers and boost local skills and employment through apprenticeships.
Funds can continue to be transferred to any employer, including smaller employers, those in their supply chains, Flexi-Job Apprenticeship Agencies, and charities. There will be no limit to the number of transfers that can be made within the allowance.
If you would like to receive or gift your apprenticeship levy, then you can get in touch with the LCR Employer Brokerage Service HERE.
