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Guidance on new levy scheme

A FIFTH (18 per cent) of apprenticeship levy-paying employers still don’t understand how the new scheme works. Merlin Supply Chain Solutions offer guidance for those paying the levy, that are still unsure of how to spend it.

The apprenticeship levy came into force on 6 April 2017. Under the scheme, firms with a payroll of more than £3m are required to contribute the equivalent of 0.5 per cent of their payroll into a pot from which apprenticeships are then funded.

Each employer has a levy allowance of 15,000, this is not cash payment. It works in a similar way to personal tax allowance and cannot be used to purchase apprenticeship training.

With an increase in the amount of apprenticeship starts during 2016-17, the new levy appears to be having positive effect and is expected to continue. However there is still a significant amount of employers unable to benefit from the levy fund due to confusion.

Research published today by The Open University also revealed that two per cent, of the 200 senior managers questioned, knew nothing about the levy at all.

However, 85 per cent believe the levy will benefit their organisation and 87 per cent were confident it would have a positive impact on UK productivity and the economy. 54 per cent were already making use of the levy and a further 25 per cent intended to – but 18 per cent had no current plans for the levy.

In order to benefit from more apprenticeships than your account will currently fund, you’ll co-invest. Co-investing means the government funds 90 per cent of your apprenticeship training and assessment costs, and you pay the remaining 10 per cent.

Likewise, if your annual pay bill is less than £3 million and you’d like to benefit from apprenticeships in your organisation, you’ll fund this through co-investment.

Hiring apprentices is a productive and effective way for businesses to grow their own talent, tailored to their specific needs by developing a motivated, skilled and qualified workforce.

83 per cent of employers would recommend apprenticeships to others.

The average apprenticeship completer increases business productivity by £214 per week, with these gains including increased profits, lower prices and better products.

The apprenticeship levy, if not spent, is taken back from employers after 24 months. If you are confused about the new apprenticeship levy, Merlin Supply Chain Solutions can work with you as consultants, throughout the apprenticeship.

Mike Parrott, of Merlin Supply Chain Solutions, said: “With the confusion surrounding the new levy, we are working to help employers make the most of their funds. Merlin Academy, part of Merlin Supply Chain Solutions, provides Trailblazer approved apprenticeship plans for LGV Driver Level 2 and Warehouse Operative Level 2, for employers to use in their workplace. We’re also available to provide consultation should you wish to access a wider array of apprenticeships. There has never been a better opportunity to develop a learning and development strategy for the short to medium term.”

Whatever the size of your business, you could train apprentices with a Government approved main training provider.

Merlin Supply Chain Solutions is registered on the Register of Apprenticeship Training Providers (RoATP) as a main training provider of a number of apprenticeships for employers. Its Trailblazer approved apprenticeship plans are tailored to individual employers’ needs and delivered on location at the employers’ workplace.

For more information call 01536 533696, visit www.merlinsupplychain.com or www.merlinacademy.co.uk or email

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