The Apprenticeship Levy

The Apprenticeship Levy is charged on employers’ “paybills” at a rate of 0.5%. The levy is payable through Pay as You Earn (PAYE) and is payable alongside income tax and National Insurance. To keep the process as simple as possible “paybill” will be based on total employee earnings subject to Class 1 secondary NICs.

Each employer receives one annual allowance of £15,000 to offset against their levy payment. There is a connected persons rule, similar to the Employment Allowance connected persons rule, so employers who operate multiple payrolls are only be able to claim one allowance.

1.) If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy from 6 April 2017. You can find out how to do this here.

You will report and pay your levy to HMRC through the PAYE process.

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

Detail on how to setup and use your online account can be found here.

2.) If you do not have to pay the levy then you can still receive support to pay your apprentices.

From May 2017, you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%), up to the funding band maximum.

If you do not pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least 2018.

Instead, you’ll need to agree a payment schedule with the provider and pay them directly for the training. The provider must prove that you have paid your contributions as a condition of government paying its contribution.

There are 2 different types of apprenticeships to choose from:

  • apprenticeship standards– each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need; they are developed by employer groups known as ‘trailblazers’
  • apprenticeship frameworks– a series of work-related vocational and professional qualifications, with workplace- and classroom-based training

To choose training:

If you would like to discuss any of this further then please contact us on 0116 2423400

Becky Edwards, Payroll Manager 

The benefits of becoming an apprentice

By deciding to do an apprenticeship the transition from school into the working world was made a lot easier. I still wanted to learn and get qualifications but I found this difficult to do in a classroom as the learning was not hands-on. By doing an apprenticeship I gained intimate knowledge of the work environment which I could not have done in a classroom.

With apprenticeships there are excellent progression opportunities with different levels you can do. With the support of a skills assessor you can easily work out the best course for you, which for me was a level 2 NVQ in Business & Administration. Because the work involved in completing the NVQ was based on my job role, it was easy to complete and I could take skills I learnt from my apprenticeship and use it in my job role. I’ve now progressed on to a level 3 NVQ which I am due to finish in the next couple of weeks.

I was also able to free up some of our existing staff’s time by helping with the work they may not have currently had time to do. As well as gaining extra experience by doing this, it is also extremely helpful for Torr Waterfield and my co-workers.

The benefits of hiring an apprentice

Hiring an apprentice can make the recruitment process easier and quicker for employers as training providers will help with pretty much the entire process such as filtering CV’s, finding and recruiting an apprentice, training and accessing funding.

The wage an apprentice earns is based on their age and the sector they work in which makes it far more cost effective than hiring older, skilled and qualified staff. The cost of training can also be fully government funded or contributed to, however this again depends on the age of the apprentice and the sector your business falls within.

For more information on becoming or hiring an apprentice you can visit https://www.gov.uk/topic/further-education-skills/apprenticeships or call us on 0116 2423400 

Amy Fisher

Administrator/Reception_DSC1514

A day in the life of a junior accountant

Some of you may think that training to become an accountant involves going to university and graduating with a degree – but this is not always the case. Here is my day as a junior accountant:

It’s the dreaded Monday morning and I’m waking up nice and early so that I can attempt to miss the rush hour traffic. Get into work, turn on my computer and sit down with a brew to wake me up before starting work.

First job is a set of accounts, looking through the income and expenses, then knuckling down to balance some control accounts!

At 10am I have a catch up with one of the directors to discuss my plan of action for the week including jobs that need completing, what bills need raising, any deadlines that are looming and any courses that I will be taking.

After that I will carry on with the set of accounts I am working on for the rest of the morning, making sure that I make full use of my lunch by working on some booklets that need completing in order for me to pass my AAT qualification – currently I am working on ‘developing commercial awareness’ which involves me producing a presentation to show to my tutor based on Torr Waterfield.

When lunch is over, I will pass the finished set of accounts over to my trainer who will look through them to adjust any notes or figures to make sure that the accounts are correct. Once he has passed these back to me, I will review the notes so that I am aware of anything that I will need to look out for on my next job and do the amendments that are necessary.

It’s now time to see the client manager with the job who will scrutinize the figures and ask any questions that they will need to know in order to have a successful meeting with the client.

Once the manager has reviewed the file and is happy with the figures I will contact the client to arrange the meeting.

It’s now 5.15pm- but my day is not over!

Time for college now to learn about ‘budgeting’ for one of my five AAT level 4 exams.

At 5.45pm the tutor will go through the aims of that lesson and then the lesson commences; a 5 minute break at 7.15pm. Just an hour left!

We complete some practice questions as a group, and then jot down the home work that the tutor has set us for that week.

Finally 8.15pm – it is home time!

Jessica Cooper , Accounts & Tax 

 

National Insurance & Apprentices.

From 6 April 2016, HMRC have introduced a new relief which is designed to save Employers money if they employ Apprentices.

If you employ an apprentice you will not need to pay employer Class 1 national insurance contributions (NICs) on their earnings up to £827 a week (£43,000 per annum) which will obviously save you money.  To be eligible for this relief you should have evidence that the apprentice is under 25 years old and:

  • be following an approved UK government statutory apprenticeship scheme.
  • have a written agreement between you, the apprentice and a training provider, which meets the conditions incorporating a start date and an expected completion date.

Employees will continue to pay the standard rate of Class 1 NICs through their salary.  They won’t see any reduction in their payments.  It is employers who benefit from this change.

Do you:

  • Have existing employees under an apprenticeship?

Check the apprentice meets the conditions, ensure you have evidence to allow the relief and from 6th April 2016 adjust the employee’s NIC category to H. 

  • Have existing employees looking for training? Consider an apprenticeship

Firstly consider your business and what your needs are.  There are now over 200 types of apprenticeships across many sectors; apprenticeships are not just about learning traditional trades like plumbing or hairdressing.  There are apprenticeships in all types of work including areas like IT, business and finance and care work, with new roles being created all the time. 

The training provider will usually sort out all of the paperwork, so start by Finding a training organisation  which offers apprenticeships for your industry in your area – contact a relevant training provider and they will help you through the process including handling your apprentice’s training, qualification and assessment.  They will also see if you are eligible for a £1,500 apprenticeship grant.

  • Think you will be hiring someone new?

Hiring an apprentice is simple and now with employers benefiting financially from it, you should seriously consider it for your business when you look to recruit.  As for ‘existing employees looking for training’ above, the first step is to consider your business needs and then to find a training organisation.  They will be able to advise on the apprenticeship options available for when you recruit and may even be able to help you recruit a suitable candidate

The National Apprenticeship Service is holding National Apprenticeship Week from 14th to 18th March 2016 and is there to support employers and has made it easier than ever to employ an apprentice.  Their employer teams are on hand to guide you through the simple process of hiring an apprentice.  There has never been a better time to employ an apprentice.  For more information, visit the website at www.apprenticeships.org.uk or phone 08000 150 600.

Please contact us if you require further guidance or advice.

Becky Edwards , Payroll Manager