As a SME, there is a high likelihood that your business will not qualify for the Apprenticeship Levy. The Apprenticeship Levy only applies to organisations with an annual pay bill surpassing £3m. They must now pay the Apprenticeship Levy via their Digital Apprenticeship Service (DAS) account. If you don’t fall into this category, you are instead entitled to substantial government funding for small business apprenticeships via the Education and Skills Funding Agency (ESFA).
At the moment, only 2% of businesses are currently affected and have to pay the Apprenticeship Levy, as the majority fall under the threshold. While it is likely that in future you will need to set up a Apprenticeship Service Account, this is currently optional.
Government funding for apprenticeships
So, now you know you are entitled, we can break down the government funding for small business apprenticeships for you.
Previously, all employers – regardless of size – were required to pay a third of apprenticeship training costs, with the ESFA providing assistance to cover the remaining amount. From May 2017, as a non-levy payer, the government will fund 90% of your apprenticeship training costs. This means that, as a business, you only need to cover the remaining 10%, up to a funding band maximum amount. This is called ‘Co-investment’. This major small business opportunity provides you with the means to introduce apprenticeships into your company.
Once you have agreed a price with a training provider, you will pay your share of the costs of the training and assessment directly to them.