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FAQs about recruiting an Apprentice

What is the Apprenticeship Levy?

The Apprenticeship Levy is a new tax on businesses that will be introduced from April 2017. The levy can only be spent on an approved apprenticeship at any level.

Who will pay the Levy?

Employers with an annual payroll over £3 million and operating in the UK (including private, public sector and voluntary sector organisations) will have to pay the levy.

What will be the cost for Levy payers?

0.5% of an employer’s total payroll with a £15,000 allowance to offset the overall cost.

The levy will be paid to HMRC through the PAYE scheme and online tools will be available to employers through the new Digital Apprenticeship Service

What will be the funding mechanism for Non-Levy payers?

The government estimates that 98% of employers won’t pay the levy.

These employers will be expected to make a 10% contribution and the government will contribute the remaining 90% of the cost of training an apprentice.

Are there any incentives for businesses?

Small businesses employing a 16-18 apprentice will receive £1,000 payment (in 2 installments) for taking on a 16-18 year old on an apprenticeship framework or standard, as well as 19-24 year olds who were formerly in care or who have an Education and Health Care plan.

Are there any incentives for small businesses?

Employers with fewer than 50 people working for them will be able to train 16 to 18 year old apprentices without making a contribution towards the costs of training and assessment. The government will pay 100% of the training costs for these individuals

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