Much of the training cost is covered by the government, making ACCA apprenticeships a very cost-effective way of retaining and developing your staff and attracting new talent. The money largely comes from the apprenticeship levy, which large companies with an annual pay bill of £3m+ pay into. This can be used by all businesses to fund apprenticeships, regardless of size – and it usually covers at least 95% of apprentice training costs.
Incentives
The government has also increased incentive payments for employers hiring a new apprentice until 30 September 2021. Employers receive £3,000 for new apprentices of any age who join their organisation from 1 April to 30 September 2021. Employers can apply for this incentive until 30 November 2021. From January 2022 employers will be able to claim £3,000 for apprentices who start between 1 October 2021 and 31 January 2022. This is on top of the £1,000 employers already receive for hiring an apprentice aged 16-18, or someone under 25 with an education, health and care plan or who has been in the care of their local authority.
If you pay the levy
The apprenticeship levy is held in a fund that you can use to pay for apprenticeship training. The government also apply a 10% top up – meaning that for each £1 you pay, you have access to £1.10 as a training fund. The government also offers an allowance of £15,000 to offset apprenticeship levy payments, giving you extra money to spend. All levy payments are shared in the form of vouchers to be put towards tuition and training. Find out how to set up a digital apprenticeship service account, if you don't already have one.
If you don’t have enough funds to cover the cost of training for all your apprentices, you just pay 5% of the outstanding balance and the government will pay the rest – up to the funding band maximum (currently £8,000 for Level 4 and £21,000 for Level 7). Whilst many training providers align to these caps, if you do exceed the maximum, you’ll need to pay the additional costs.
If you have unused apprenticeship funds, you can transfer up to 25% of your levy funds to support another employer. You can find employers who want to receive a transfer by:
- working with employers in your supply chain
- getting in touch with employers in your industry
- contacting an Apprenticeship Training Agency
- working with regional partners.
If you don’t pay the levy
If you don’t pay the levy, you pay just 5% towards the cost and the government pays the rest, up to the funding band maximum (currently £8,000 for Level 4 and £21,000 for Level 7). This is for apprentices aged 16 to 18, or aged 19 to 24 with an education, health and care plan provided by their local authority or who have been in the care of their local authority.
If you employ fewer than 50 employees, additional funding means the government could pay 100% of your apprenticeship training costs. In both cases, if you exceed this maximum, you’ll need to pay the additional costs.
Employers who pay the apprenticeship levy but don’t use it all can also choose to transfer up to 25% of their unused funds to you, to help you pay for training. You can find employers who may want to transfer funds by:
- speaking to your training provider
- working with employers in your supply chain
- getting in touch with employers in your industry
- working with regional partners.