Basically, the apprenticeship levy refers to a type of taxation. The purpose of this levy is to support companies so that they can offer more apprenticeships. The idea was to boost training and develop apprenticeship programs. Let’s find out more.
An apprenticeship levy is a tax that employers are supposed to pay. This tax is used to create a fund that provides money to cover apprenticeship-training costs. Given below are the features of this tax:
The apprenticeship levy is a government scheme to provide funding for apprenticeship programs. According to the levy rules, if the payroll is over £3 million, the employer has to pay a levy of 0.5% on the total payroll. And a government allowance of £15,000 offsets it. The amount of levy is paid on a monthly basis via PAYE in addition to the national insurance contributions and income tax.
Levy’s contributions show up in an account that employers can use to pay for the training. According to the rules, employers can use these funds to pay for apprenticeship training only.
After two years, the unused funds reach the expiry date and go back to the government. Non-levy paying employers may cover 5% of the course cost and the rest of 95% will be on the government
The apprenticeship levy is beneficial for businesses. Plus, it can help provide financial support for the training and development of apprenticeship programs.