The Government’s new Apprenticeships Levy (AL) kicks in next April, and all companies with a payroll over £3m will need to pay it at 0.5% on their paybill above that figure.
In England these employers can use the money raised by AL vouchers towards the cost of apprenticeship training. In Scotland and Wales, we are still waiting to hear how the funds raised by the AL will be used.
The government will not exempt employers who already pay the CITB Levy from the AL. So CITB needs to work with employers to look at how any potential future CITB levy would sit alongside the AL. This is a complex issue and employers have said that CITB should provide the time to have a meaningful consultation on this.
CITB has therefore agreed with government that it does not need to accelerate the Consensus process but can stick to the original timetable, which will see formal Consultation on the CITB levy start in January 2017 on a new 2018 Levy Order. By then you will have the full details of the Apprenticeship Levy and CITB will have set out its offer to the industry and agreed with you how it will modernise the Grants Scheme.
HAE have been speaking with CITB about this over the past few months. We think a full consultation on the future of the CITB Levy is essential. To make this possible, there will be a one-year ‘transition’ package from April 2017, when the Apprenticeship Levy comes in. This will provide enhanced grant support on their training activity for one year to employers who are required to pay the AL to mitigate the burden of paying both levies.
This will not affect the grant support available to firms not paying the AL as this is temporary transition package will be funded through efficiency savings and reserves.
If you have any queries about the above you can contact the team on 44 (0)121 380 4600. Further information can also be found in these two items: