The Apprenticeship Levy – April 2017
School Type / Affect of the Apprenticeship Levy1. Community (C),
2. Voluntary Controlled (VC)
Local Authority is the Employer / LA’s will be responsible for paying the Levy in Community schools they maintain, where the LA employs the staff and pays National Insurance (NI) Contributions. Such staff will be counted as part of the LA’s payroll. The cost of the Levy will be passed onto schools in the same way that employer NI and Superannuation is. Schools will have access to funding for apprenticeship training via the LA’s Digital Apprentice service account managed by the councils Workforce Development service.
How will the Levy be paid
· The LA will calculate and collect the value of the Levy on a monthly basis for each
Individual school.
· The Levy is 0.5% of the total pay per month, not including National Insurance and Superannuation
1. Foundation Schools
2. Voluntary Aided Schools (including Learning Trusts)
Governing Body is the Employer / Voluntary Aided and Foundation schools, in these schools the Governing body is considered to be the employer, rather than the LA. Therefore, each VA/Foundation school liability for the Levy will be based on its own paybill. In practice, the council is likely to administer the payroll for many VA/Foundation schools and the school may not have its own HRMC payroll reference number separate from the LA.
Schools with a Gross pay value under £3Million and buy the LA payroll services
· Foundation/VA schools with pay under £3Million, with the same payroll reference as the LA do not have to split out with a separate payroll reference number, the LA in reporting the amount of Levy due will need to find a way of excluding the pay of the small Foundation/VA schools from the calculation of the LA’s liability for the Levy
· The software provider has confirmed these schools can be excluded in the system configuration. This will happen prior to April 2017
Schools with a Gross pay value over £3Million who buy our payroll services
· Schools with a gross pay value over £3millin will be moved to a stand alone payroll with their own unique Employer Tax Reference (or PAYE) code
· These schools will have some action to take to commence the process of obtaining their PAYE code which must occur promptly on /around 6 February 2017
· Guidance will be given from Contracts and Payroll in early February as to the actions they need to take.
· The Levy is 0.5% of the total pay per month
What if my payroll is not administered by the LA?
· You need to make arrangements with your payroll provider to calculate the Levy payment on your behalf to ensure the correct payment is made to HMRC.
1. Academies (including those forming part of a Multi-Academy Trust [MAT])
Academy Trust is the Employer / MATs and standalone Academies
· The Trusts of MAT’s and standalone academies will typically be responsible for paying the Levy where they are responsible for paying Class 1 NICs.
What if I am a MAT or standalone Academy buying payroll services from the LA?
· If you don’t have a gross pay value of £3 million, there is no further action
· If you do have a paybill of £3million and you buy payroll services from the LA, then the LA will pay over the schools Levy to HMRC as part of its payroll admin role. This would have to be funded by the school.
· If the LA administers the schools payroll the LA and the school need to make sure the school is set up as a separate employer on HMRCs systems
What if I am a MAT or standalone Academy and I don’t buy payroll services from the LA?
· If you have a gross pay value over £3million, You need to make arrangements with your payroll provider to calculate the Levy payment on your behalf to ensure the correct payment is made to HMRC,
· The Levy is 0.5% of the total pay per month
FAQs
What is the Apprenticeship Levy?
From April 2017, the way apprenticeships are funded is changing a part of a series of wider reforms to the apprenticeship system in England. Employers with a gross pay value over £3million will be required to pay an Apprenticeship Levy. In England employers who pay the Levy will be able to access funding to pay for apprenticeship training and assessment via a new Digital Apprenticeship Service.
What is the benefit of this system?
Apprenticeships are now the cornerstone of the skills system and provide opportunities for all sectors, including education and at all levels. The apprenticeship Levy will boost economic productivity while increasing the countries skills base and giving millions the step on the ladder of opportunity. The Government is encouraging LA’s and schools to work together, using the Levy to meet skills gaps and future workforce needs. This can be for both existing employees and new starters.
How does the Apprenticeship Levy Affect Schools and Academies?
The table above summarises how the Levy will likely apply to schools based on the current guidance. The Government recognises that as there are a variety of pay bill arrangements in the Education Sector. Schools should read this alongside the full published guidance on calculating, paying and spending the levy and seek appropriate professional advice on their liability. Further Guidance has been published recently for schools https://www.gov.uk/government/publications/apprenticeships-reforms-guide-for-schools . At the end of the document there are details on Apprenticeship Standards and Frameworks relevant to schools that are available or under development.
What types of apprenticeship qualification are available?
Apprenticeships are available in many jobs within schools, including Teaching Assistants, Business Administration, Leadership & Management, Science and ICT Technicians and many more. https://www.gov.uk/topic/further-education-skills/apprenticeships. There are longer term plans to introduce a Teaching apprenticeship. Early work on developing a teacher apprenticeship standard is also underway, led by a group of schools co-ordinated by the Teaching Schools Council. There is not a firm timescale for the introduction of a Teaching Apprenticeship; we expect more information to become available soon. In addition, a consortium of schools led by Hughenden Primary in Buckinghamshire is developing a Teaching Apprenticeship Standard and assessment criteria. The aim is to have this in place by the end of 2017.
Who manages the Levy funds on my behalf?
If you are a Community or Voluntary Controlled school, you will pay the Workforce Development team via an SLA. Provisional details are as follows:
· 3 hours @ £15 per hour for managing the DAS Total per Apprentice £45.00
· Apprenticeship Assessment Centre. Total per Centre £45.00
· Both of the above options Total £85.00
How do I access funding for Apprenticeships if I don’t pay into the Levy?
Employers who haven’t paid the Levy and want to purchase an apprenticeship from a training provider will be able to do this, the Government will pay 90% of the cost of the training and assessment, the employer will be responsible for paying the remaining 10% of the costs. For non-levied paying employers we will continue to use the existing method of funding directly to training providers. So these employers will not have to set up a digital account in May 2017. These employers will be able to access apprenticeship funding through a provider with an apprenticeship contract with the SFA.
When does the payment go into the DAS?
The First payment will be paid over to the Inland Revenue and go into the Digital Apprentice Service in May 2017; this amount will be based on and taken from April’s paybill. Payments go in one month in arrears.
Do all Academies have a Separate PAYE code?
All Academies are set up in their own right under a separate PAYE code
Where the LA is the payroll provider of an Academy and they have a paybill over £3million how is the DAS administered?
You will receive access to the Digital Apprentice Service in your own right and administer this yourself.
Where can I find out about Apprenticeship Registered Providers?
https://roatp.apprenticeships.sfa.bis.gov.uk/download
Where can I find more information?
For the Apprentice Levy you can contact
Julie Comb, Corporate Lead Workforce, Workforce Development, Tel: 01422 288340, Mobile: 07872 418245 email:
Liz Richardson, Commissioning & Procurement Advisor, Workforce Development, Tel 01422 393626, email:
For Contract and Payroll advice you can contact
Leigh Watters, HR Team Leader, Contracts and Payroll, HR, Tel 01422 288365, email:
Nicola Goldsmith, Business Manager Schools, HR, Tel 01422 288430, email: