From April 2017 the national apprenticeship programme will be expanded with the introduction of the apprenticeship levy. The aim of the levy is to fund 3 million new apprenticeships by 2020, encouraging businesses to employ apprentices or retrain their existing staff.
The apprenticeship levy will be charged at 0.5% of the organisations payroll payable through the PAYE along with income tax and national insurance contributions.
Organisations will be exempt from the first £15k of the levy, which translates to the levy only being charged for payrolls in excess of £3 million per year, irrespective of if the organization employs apprentices. Therefore, the levy will apply to 2% of UK employers.
Public sector organisations will also be required contribute to the levy if their payroll meets the aforementioned criteria, and 2.32% of their staff must be apprentices.