On 17th October WhiteHat and Frazer Jones hosted a jam-packed breakfast event The Levy Runs Dry to mark the six month countdown to funds in the apprenticeship levy beginning to expire. Over sixty representatives from HR, talent and management filled the room for a lively panel discussion and Q&A about the apprenticeship levy and strategies for using it before losing it.
Topics covered included:
- Origins of the apprenticeship levy
- Recent changes to the levy affording employers greater flexibility in how they use funds
- How to prepare for 6th April, 2019
- Practical tips for HR professionals considering taking on their first apprentices
- Innovative uses of the levy if your business looks like it won't be able to spend it all
Here are the key takeaways:
What is the levy, and is my business paying it?
Simply put, the Apprenticeship Levy was introduced in April 2017 as a way of encouraging employers to invest in apprenticeships. And if you’re a business with offices in the UK and an annual PAYE bill of £3 million or more, you’re going to be paying 0.5% of that bill, in to your levy pot. After 24 months, any funds that have gone unspent in your pot will start to expire and be taken by the government as a tax, which means come April 2019, millions of pounds of potential training funding will be lost. Use it, or lose it!
Time’s running out! What exactly can we spend it on?
Your levy pot is there to be spent on apprenticeship training, which can be used to upskill existing employees, or attract and retain brilliant new talent in to your business. As long as you’re spending it with a registered training provider (like WhiteHat!), you’re good to go. You’ve got hundreds of different apprenticeships to choose from, too, from Software Engineering and Accounting, to People Leadership and Digital Marketing. So whether you’re looking to plug a skills gap or increase diversity in your business, the apprenticeship levy can help.
We’ve not taken on apprentices before - what should we put in place to ensure our scheme is a success?
In order to achieve the best outcome, you need investment at every level of the business, whether it’s senior management, or people who will be interacting with apprentices on a daily basis. Having visibility on what your apprentices are learning in their qualification also means you can start to think about how that can be applied in the workplace, so keeping lines of communication open with your training provider is essential. A solid community also makes for a more successful apprenticeship scheme, so hiring more than one apprentice at a time can yield better results.
I don’t think we’ll be able to spend all of our levy in time...
The government have thought about this, and have now made it easy for employers to donate up to 25% of their funds to other organisations of their choice, to spend on apprenticeships.
How are businesses using the levy funds?
The levy doesn’t have to be spent on new employees. There are organisations who are using it primarily to upskill senior management by classifying them as apprentices and using the funds for executive MBAs. This is a risky approach. Anecdotally the government isn’t a huge fan of such practices. However, training mid-level staff for management and leadership roles is considered more in keeping with the policy.