Don’t let your contributions go back to the treasury

Posted on Jun 28, 2019

Introduced over two years ago, the apprenticeship levy has transformed the ways that businesses think about their training and development opportunities. However, reports have shown that many aren’t using the levy to their advantage.

As April approached, so did the deadline for funds to begin making their way back to the Treasury. Whilst many employers have used the levy to their advantage to either upskill and retrain existing employees or to hire a future generation workforce, some employers haven’t grasped the possibilities that the levy provides.

By letting contributions make their way back to the Treasury, businesses are accepting the levy as just another business tax. In April, skills minister Anne Milton MP acknowledged in a parliamentary answer that levy payers only utilised 15% of the total funds available to pay for apprenticeship training – meaning over £400m of funds have been lost.

In order to fully utilise the apprenticeship levy, it’s important that businesses understand the reason it was introduced – to support businesses with upskilling their staff and to meet the government vision to reach three million apprenticeship starts by 2020.

Chief Operations Officer at Learning Curve Group, Judith Allen, said: “With a clear plan and understanding, the apprenticeship levy can provide outstanding opportunities for businesses. It’s a shame that many businesses are not utilising their contributions, as the levy can be a great way to strengthen internal training programmes and really develop existing members of staff, as well as recruit into expanding areas.”

While the levy can only be used for eligible apprenticeship programmes, anyone in a business can enrol onto an apprenticeship.

No longer are apprenticeships only for young people trying to get their foot on the ladder. Staff at any level of your business, from entry level to CEO, can enrol onto a relevant apprenticeship no matter their prior attainment. In fact, since the levy was introduced, advanced level apprenticeships have been on the rise, as more businesses are enrolling senior teams onto relevant programmes to support internal development programmes.

Any business that pays into the apprenticeship levy will now begin to lose any unused contributions every month. Up to 25% of funds can also be transferred to other businesses for them to spend on apprenticeship training.

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