One in four SMEs are already employing an apprentice, according to a survey by the Federation of Small Businesses.
The government’s levy reforms mean apprenticeships make even more commercial sense for SMEs. The levy will be paid via PAYE on annual bills exceeding £3million, which equates to less than 2% of UK employers. Although not all employers will be required to pay the levy, employers of all sizes will be able to draw funds.
The levy, which has been effective from 6 April 2017, is effectively a tax on employment. The government aims to have 3 million apprentices in the workforce by 2020, and this levy will be used to cover the training costs.
For businesses that agreed to hire an apprentice before 1 May 2017 will be funded on the terms effective at the time of the agreement. For some apprentices, this might be before the new rules came into effect.
Non-levy paying employers with apprentices will be required to contribute 10% of training costs, with the rest of the costs covered by the government. Businesses with fewer than 50 employees will not need to pay anything if they employ an apprentice under the age of 19 years. These businesses will also qualify for a £1,000 payment from the government, on the condition the training is provided by an approved centre.
What are the terms of an apprenticeship?
Apprenticeships can last from 1 to 4 years, and the individual will need to take time out of work to complete their training. The employer must pay their apprentice at least the national minimum wage, if they are aged over 19 years. The apprentice must also have the same rights and benefits as an employee.
Taking on an apprentice can be of great benefit to a businesses, as reporting by 96% of businesses surveyed by the FSB.
Apprenticeships within a business can help to raise the skill level, reduce recruitment costs, grow the workforce and enable more qualified staff to complete higher value tasks.
Could it work for your business? You can find further information here, or you can contact us on 01923 224411.