What Is the Apprenticeship Levy and How Does It Benefit You?

two apprentices with a mentor in car engineering workshop

The phrase ‘Apprenticeship Levy’ is one often used among employers across many industries, yet there are many apprentices (and some businesses) who are unsure as to what exactly it entails.

Moreover, those unaware of the apprenticeship levy are also unaware of the benefits it can bring to employers and apprentices alike.

Many of these benefits become much clearer once you become knowledgeable in the apprenticeship levy, however, there are still some that aren't all that apparent.

This is especially the case from the apprentice’s point of view, which is why we’ve assembled the benefits of apprenticeship levies for both the employer and the apprentice.

What Is The Apprenticeship Levy?

First of all, it’s important to understand the apprenticeship levy in every aspect before exploring the benefits it presents.

Essentially, the apprenticeship levy is a business tax you are required to pay to the government

For the current financial year (2018/19) the amount payable for every employer with an annual pay bill of more than £3 million is at a rate of 0.5%.

This levy applies whether they have an apprentice or not. In short, the tax is compulsory if your pay bill falls over that threshold.

It is paid alongside your PAYE and national insurance contributions. In short, to pay the apprenticeship levy, it is like paying any other tax or bill.

If you're 0.5% calculation of your annual payroll bill is £15k or less, you don't pay the levy. If it's above the £15k then that's the cost you will pay in apprenticeship levy.

The Aim

The overall aim of the levy is to help improve standards for apprenticeships across the country, making them a more attractive option for young people than full-on degrees.

The levy is there to act as an incentive for more businesses to use apprenticeship provision as the main form of development within their businesses.

How It Benefits Employers

Knowing what the levy entails, it should become fairly obvious how it benefits employers and their businesses, particularly those who have hired one or more apprentices.

In any case, whether you’re a levy payer or not, apprenticeships are a great way to upskill your existing workforce alongside bringing new people into the organisation.

Improved Relations

Investing in your staff is a great way to improve morale and motivation in the workplace. Not only do you benefit from this as an employer, but the employee should also see the benefit from a job flexibility and satisfaction point of view.

How It Benefits Apprentices

Because the apprenticeship levy is primarily focused on the employer, it’s easy to ignore the apprentice’s side of things. If anything, they stand to gain more than the business thanks to this levy.

Better Facilities

A business with great apprenticeship facilities is a great opportunity to learn and earn while having a great time while you’re doing it.

Sub-par apprenticeships tend to leave a sour taste in the apprentices’ mouths, especially if it’s apparent the employer doesn’t really care about them. So, this levy can be nothing but good news for any would-be apprentice.

Make Friends for Life

Apprenticeship training means you will get the chance to meet new people and not just your fellow colleagues! A lot of apprentices make new friends via their apprenticeship programmes.

It’s scary when you enter a new environment, but making friends along the way is the best way to help you cope. And with the apprenticeship levy increasing the number of apprentices in the workplace, it means there are plenty more chances to make lifelong friends.

More Qualifications

The introduction of the apprenticeship reforms has seen apprenticeship programmes being available from level 2 right the way through to level 7.

This means that a degree is now achievable via an apprenticeship.

Learn with GET

At Gloucestershire Engineering Training, we offer many opportunities to study under an apprenticeship.

Every one of our apprenticeship programmes offers a unique opportunity to study what you love doing best while earning an income.

If you’re thinking of applying for one of our apprenticeships next year, visit our apprenticeships page at GET for more information.