Employers rebranding training schemes as apprenticeships

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Employers rebranding training schemes as apprenticeships

Employers rebranding training schemes as apprenticeships

Almost half of employers plan to access the £15,000 training fund provided by the Apprenticeship Levy (the “Levy”) by rebranding their current training schemes as new ‘apprenticeships’.

In order to ensure that they can access the apprenticeship fund, measures are being taken by employers to internally rebrand existing training schemes and work experience schemes as Level 2 Apprenticeships. Once achieved, a Level 2 Apprenticeship is equivalent to five GCSEs and fall into the Levy’s remit where the previous training schemes did not.

A survey conducted by the Chartered Institute of Personnel and Development (the “CIPD”), involving more than 1,000 employers, found 53% of employers contributing to the Levy would favour a more flexible training levy, which would be more suited to their individual training requirements in specific business sectors.

Employers should become fully aware of the benefits of the Levy and its scope:

  • The Levy was introduced under the Finance Act 2016 and is payable by employers through PAYE, alongside income tax and NICs with effect from 6 April 2017.
  • The levy is payable by companies who are liable for employers' National Insurance Contributions in a tax year.
  • It is also payable by public authorities and mediators contracting to supply workers to them.
  • It applies to employers with an annual payroll of more than £3m and is charged at 0.5% of their employees’ total salary.
  • The Government reports that less than 2% of employers will be liable to pay the levy.

Reports on the early impact of the Levy suggest that almost a fifth of employers subject to the Levy see it as a tax, and do not plan on using their apprenticeship allowance at all.

A spokesperson for the CIPD has commented that “apprenticeships are extremely important, but other forms of training are equally valuable and often more flexible and better suited to the needs of organisations.”

Ultimately, employers should adapt their training programmes to meet their sector standards and ensure that any training scheme adaptions are carried out in the best interests of their business and its employees.

If you would like more information on this subject, or if we can help you with any other employment law issues, please contact Millie Kempley or you can give us a call on 0345 070 6000.