In an attempt to expand the total number of apprentices in England to three million by 2020, the Government has implemented an apprenticeship tax to be charged to large employers, which will be introduced in April 2017.
After years of speculation as to how the new tax will work, the Department for Education (DfE) has finally announced the structure of the levy and how big businesses will be required to invest.
In the 2015 Summer Budget, the Government announced that it would introduce an initiative to support the demand for a major increase in apprentices by 2020, and to address the decreased focus on employee training outside of the workplace.
Set to come into force in April 2017 (with payments to begin in May 2017), the levy will require large employers to invest in apprenticeships, with the size of the investment dependent on the size of the business.
The purpose of the levy is to encourage employers to contribute towards this rising demand for apprenticeship programmes, and to raise additional funds to improve the quality of the training schemes.
The Apprenticeship Levy, paid by large employers both in the public and private sectors, upon payment will be accessible in the form of a digital apprenticeship service account. This will then allow the businesses to select and pay Government-approved training providers and post apprenticeship vacancies.
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