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The government proposes to apply the Levy to large employers across all industries, throughout the country. The Apprenticeship Levy is being introduced as part of the government’s plan to help fund 3 million new apprenticeship starts by 2020.
The Levy Payment
The levy will be applied to all industries in the UK and will first come into effect in April 2017 at a rate of 0.5% of an employer’s wage bill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. The levy payment will only be paid by employers who have an annual payroll of more than £3 million, which represents only 2% of UK employers.
Digital Vouchers
Employers who pay the Apprenticeship Levy and provide apprenticeships will be able to draw down their levy pot contributions as digital vouchers to use to train their apprentices. This voucher system only applies for employers in England. Employers will be allowed to spend their digital vouchers within a period of 24 months. All employers will also receive a 10% ‘top-up’ payment.
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