Apprenticeships are widely used in the health and fitness industry, providing opportunities for young people to enter the workplace and gain qualifications at the same time. Apprenticeships help businesses to increase productivity and performance as well as create a competent and committed workforce.
However, from 6 April 2017, all UK employers with wage bills of over £3m must pay the government an Apprenticeship Levy. The levy is 0.5 per cent of a business’ payroll and will be collected by HMRC via PAYE. All employers have £15,000 to offset against the amount they owe, such that the 0.5 per cent levy only applies to wages paid over the £3m threshold.
The purpose of the new levy is to encourage all employers to invest in apprenticeship programmes and to improve the quality and quantity of their apprenticeships.
The fund can be accessed by employers to fund apprenticeship training in their business. The levy will be paid monthly and it will be accessed online via a digital apprenticeship service account.
The government will add 10 per cent to the digital account and the funds will be available to use for 18 months. Any unused money in the fund following this time will be used by the government to fund apprenticeships for SMEs, so all employers should benefit.
So, if your company pays out more than £3m in wages, be prepared for the compulsory levy coming into force in April – but let’s see it as an opportunity for businesses to fund new apprenticeships and grow and enhance their workforce.