Your levy payment will then be ring-fenced in the form of electronic vouchers. Employers use this voucher to purchase apprenticeship training and assessment from approved providers and organisations, from May 2017 onwards.
Levy funds (vouchers) will be accessed and managed via a new online portal called the Digital apprenticeship Service (DAS).
All un-used vouchers will expire after 18 months.
“The Government estimates that 2% of UK employers, approximately 22,000 organisations, will be required to pay the apprenticeship levy.”
Based on current Education & Skills Funding Agency (ESFA) funding rules, the levy can be claimed back and spent on apprenticeship training for all employees at all levels and ages.
The levy can also be used to fund existing employee development as long as they meet the current ESFA funding criteria.
It is estimated 3-5% of an employer’s workforce will need to be an apprentice to fully utilise the levy.
Where employers require more funds for their apprenticeship programmes than their digital account enables, the government will support and help employers meet 90% of these additional costs. Employers will be asked to make an additional 10% contribution paid directly to the government or chosen provider.
Apprenticeships are a devolved policy. This means that authorities in each of the UK nations manage their own apprenticeship programmes, including how funding is spent on apprenticeship training. The DAS will support the English apprenticeship system. To calculate how much you will have to spend through the English system, the government plans to use data they already hold about the home address of your employees. This data will be used to calculate what proportion of your pay bill is paid to employees living in England. This assessment will be made in early 2017.