Are you unwittingly paying for other companies’ apprentices?
If your company’s annual wage bill is over £3 million per year, you will have been paying a tax equivalent to 0.5% of its total into the Apprenticeship Levy every month since April 2017.
You can get it back – but only if you spend it on training apprentices through an approved scheme.Furthermore, since April 2019, every monthly contribution you’ve made but not spent has gone back to the government. They give this money to SMEs who are non-levy payers for their training costs. You won’t see it again.
So, if you’re not claiming your Apprenticeship Levy contributions back, you’re unwittingly paying to train other companies’ people instead of your own employees.
There’s no plan to change this, so it really is a case of use it or lose it.
One great way to use it is through Marketing Debuts, the apprenticeships scheme we launched on 10 September.
There are other financial incentives, too. We’re working with The Opportunity Group, a regulated apprenticeships provider, who will ensure you get all the financial assistance available to you as a Marketing Debuts employer.
For example, when you’ve spent what you’ve paid into the levy, you’d normally pay 5% towards further apprenticeship training. However, because we and The Opportunity Group, will be organising transfers of unspent funds from other levy payers, the cost of all apprentice training is fully funded through the Marketing Debuts programme.
Plus, if your apprentice is a new hire and will be under 25 on 31 January 2021 (a requirement for Marketing Debuts) you’ll get £2,000 in the form of an apprenticeship bonus. You can put this towards the apprentice’s salary or other costs related to their training or employment.
And there’s more. If you hire someone who is under 25 on an approved apprenticeship – such as Marketing Debuts – you’ll also get relief on employer Class 1 National Insurance contributions (NICs). That’s worth 13.8% of what you pay your apprentice over and above £732.01 per month.
Existing employees can become apprentices, too
Any employee at any age can be an apprentice. In fact, you can create a cohort combining existing employees and new hires. For Marketing Debuts, we’d wish to assess any existing employees for the programme in the same way we do for new hires and you’d need to keep them on their existing salary. You wouldn’t have to promote them at the end of the programme, though. The £2,000 apprenticeship bonus doesn’t apply for existing employees but the 13.8% NIC break does if they are under 25.
Get on the receiving end of unspent Apprenticeship Levy funds
If you don’t pay into the levy, we’ll organise for a large company with unspent Apprenticeship Levy contributions to donate them to you. Once secured, the transfer of those funds will cover 100% of the training costs. The Opportunity Group will manage this process for you. And you’ll get the £2,000 apprenticeship bonus and the 13.8% NIC break as well.
So, as well as access to great creative talent you may otherwise miss, an additional feather in your D&I bow and the chance to shape the future of our industry’s workforce, the financial incentives are another great reason to become a Marketing Debuts employer.