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The Apprenticeship levy 

Buzzacott's fifth feature looks at the apprenticeship levy and how it affects academies

Posted by Hannah Oakman | December 19, 2016 | People, policy, politics

The Government launched its White Paper in March 2016, which has been the subject of much interest in its aim to drive every school to be an academy. How far that particular aim is driven remains to be seen but the White Paper does continue along a path of radical change that all schools, currently within or outside the academy movement should take heed of. 

More than half of academies are already part of a multi-academy trust (MAT) with many more set to form or join MATs. The new language is ‘supported autonomy, alignment of funding, control, responsibility and accountability in one place, and institutional collaboration’. The White Paper signals a ‘school-led’ system where improvement is delivered by effective education leaders and every school is an academy.

Senior management and trustees should be familiar with the White Paper’s contents, which should form the backdrop to academies strategic planning. 

Whether you are in a single academy trust (SAT) or an MAT, you work in a complex statutory framework. This update covers some of the latest news on what is happening in the sector, including updates on key financial, compliance and assurance issues and helps signpost you to information relevant to your areas of accountability.

Buzzacott accountants have produced a series of short articles proving an overview of the academy sector. 

Read on to read the fifth part in our series based around the Apprenticeship Levy:

Apprenticeship Levy

Introduction of the Apprenticeship Levy

Updated guidance on the introduction of the Apprenticeship Levy to be effective from April 2017 was issued on 12 August 2016.

From 6 April 2017 all employers will be required to pay, via PAYE, a levy of 0.5% of pay. A levy allowance of £15,000 for each tax year will be granted to all employers, which means that employers with a pay bill of under £3m will not be required to pay a levy.

The pay bill relates to earnings subject to Class 1 secondary national insurance contributions, which include any remuneration or profit coming from employment, such as wages, bonuses, commissions, and pension contributions on which NICs are paid.

The levy allowance will operate on a monthly basis (£1,250 per month) and will accumulate throughout the year. Any unused allowance will be carried from one month to the next.

If the employer has some unused allowance in one month but paid the levy previously in the tax year, a credit can be used to offset against other PAYE liabilities.

Where an employer operates multiple PAYE schemes and does not use the full £15,000 allowance, the unused amount can be used to offset against another scheme once the tax year has ended. 

However, where a group of employers are connected they will only be able to use one £15,000 levy allowance and the levy must be apportioned at the start of each tax year.

Online tools for employers will be available via the digital apprenticeship service over the next year. Academies will be able to register to create their employer accounts from January 2017.

Amounts paid by employers will be put into a fund, which will be credited with a 10% Government top-up. They will then be able to purchase apprenticeships directly from training providers via the Digital Apprenticeship Service.

Digital Apprenticeship Service

The Digital Apprenticeship Service will be established to assist employers in:

• Selecting an apprenticeship framework or standard

• Choosing the training provider or providers they want to deliver the training

• Choosing an assessment organisation

• Posting apprenticeship vacancies 

From May 2017, employers paying the levy will also be able to:

• See the funds they have available to spend in England

• Set the price they have agreed with their selected training provider 

• Pay for apprenticeship training and assessment through the digital apprenticeship service

To find out more about Buzzacott, visit their website or email them at enquiries@buzzacott.co.uk.

Previously published features in this series are The Funding landscapeCompliance for academiesAssurance for academies and Financial reporting and regulation

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