Government presses ahead with plans to impose levy on large employers

The government has revealed details of its apprenticeship levy for large employers.

Employers in any sector will have to pay the levy if they have a pay bill over £3m a year. Firms will have to begin paying the levy from 6 April next year and will be able to start claiming funding from the following month.

Types of apprenticeship will now come under 15 different funding bands, ranging from £1,500 to £27,000 per apprentice, depending on the complexity of the programme.

Examples given by the government include maximum band 15 funding of £27,000 for chartered surveyors, nuclear engineers and utilities engineering technicians, while welders would receive either band nine or 10, of either £9,000 or £12,000 a year.

The government confirmed that industries where a levy is already imposed - including construction through the CITB - will have to pay both levies as required.

A consultation on the proposals will run until next month, with employers invited to submit their comments to the Department for Education.

The government had faced calls from employers to delay the introduction of the charge due to the prospect of a recession, but the government’s planned start date of April 2017 was confirmed.

Skills minister Robert Halfon said: “Our businesses can only grow and compete on the world stage if they have the right people, with the right skills.

“The apprenticeship levy will help create millions of opportunities for individuals and employers.”

Steve Radley, director of policy at the CITB, said the further details of the apprenticeship levy will help its levy working party, made up of representatives from across construction, “shape ideas for how the CITB levy can work for industry in the long term.”

Radley added that the CITB has agreed a transition package with firms paying both the CITB levy and the apprenticeship levy next year.

He said: “Under this arrangement these firms will be able to claim CITB funding at an enhanced rate, capped at their level of apprenticeship levy contribution. These funds will primarily come from the organisation’s efficiency savings.”

Federation of Master Builders chief executive Brian Berry praised the levy plans and said the funding arrangements “take into account the support that small employers need.”

He added that, under the plans, employers below the £3m levy-paying threshold will only have to pay 10% contributions towards the cost of training and assessment, meaning “most small employers should not end up paying more towards training costs than they currently do.”

Proposed apprenticeship funding bands

Source: Department for Education