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The Apprenticeship Levy is up and running! But in the wake of this monumental change to apprenticeship funding, what does this mean for businesses large and small in the plumbing and heating industry?

Lets start with those who have to pay the levy. Businesses with a payroll over £3m per annum will have to pay 0.5% of their wage bill towards funding apprenticeships, (employers get a £15,000 fixed annual allowance to offset against the levy payment). This will hit many of the CIPHE’s Industrial Associate members, along with the really large plumbing and heating firms. Yet reports in the media state that up to two-thirds of employers are still unaware of what their obligations are.

However, it’s important to know that it is not all doom and gloom for those who have to pay. Once employers have registered for an apprenticeship service account, they can use that money, plus a 10% government contribution, on apprenticeships within their own organisation. This can either be through external training providers, or businesses can bring apprenticeship schemes in-house, as long as training is delivered by an approved provider and subject to Skills Funding Agency (SFA) quality arrangements and Ofsted inspection.

So in effect those paying the Levy can see all of their money back, plus 10% on top if they invest in apprenticeships.

At the other end of the scale, the average plumbing or heating business will be exempt from the levy as they sit below the £3m payroll clause of the Levy. This actually means that it’s a good time for one-man bands and small to medium enterprises to take on an apprentice. If these businesses choose to take on an apprentice aged between 16 to 18 years old, they will receive 100% of the cost of the training from the Government (up to the maximum funding bands). Those taking on apprentices aged 19 or over have to pay just 10% with the Government picking up the tab for the extra 90% (up to the maximum funding bands). Additionally, businesses with less than 50 employees, who do not pay the Levy, are also being offered a £1,000 incentive towards taking on an apprentice aged 16 -18 years.

So in a nutshell, if you have to pay the Levy, the wise choice is to invest in apprenticeships to see that money returned with a 10% Government contribution on top. If you don’t pay, and you’ve been thinking about taking on an apprentice, then it’s a great way to strengthen and grow your workforce.

These useful links will help you find out more:

Apprenticeship funding: how will it work 

The Apprenticeship Levy – Your questions answered

How to pay the Apprenticeship Levy