We're sure you know how the apprenticeship levy will impact your business when it kicks in next April, but it's not always easy to present this in a way that senior leaders understand. Here at Success at School, we've created a wonderfully simple levy calculator so you can show management the benefits of taking action now.
Our calculator is designed to help you understand the practical impact of the levy. Perhaps most importantly of all, you can use it to work out how many apprentices you need to hire to use up all the funds in your digital account.
You probably know everything there is to know about the levy already, but here are the key facts to make sure you're fully prepared:
- The Levy will be 0.5% of your company’s pay bill.
- If your total payroll is less than £3m, the government offset will cover your levy cost.
- You will start to pay the levy from April 2017.
- The levy will be deducted automatically and credited to your digital account on a monthly basis.
- The government will top up the digital account by 10%.
- Training providers will be paid directly out of this digital account.
- There are funding caps on training which will vary depending on the standard.
- The levy payment is tax deductible at the current rate of corporation tax. This means if the credit expires the real cost is approx. 20% less if your earning before tax exceed the amount of levy expiring.
- Your organisation will see a real impact on its cash-flow each month, but will only see an impact to its balance sheet after 24 months.
- Credit in your digital account will expire after 24 months.
- You can transfer 10% of the funds in your digital account to other employers to spend on training.
Here are a few things that our calculator can help you plan:
- The amount of levy your organisation will pay into your digital account every month.
- The value of your digital account each month.
- The number of apprentices you need to hire to use up the credit in your digital account.
- The starting dates of your apprentices so you don’t overspend your credit (unless you want to).
- The cost and length of training each of the different type of apprentices you hire.
- The value of the expired credit and hence the loss to your organisation if the digital balance isn’t used up.
- The cost of training if you hire apprentices and your digital account is empty.
Remember, all our numbers are estimates, but they will help guide your plan for handling the levy.
Our calculator brings you a simple way to calculate the levy spend, the number of hires, and the training needed in a way that senior leaders will understand, so you and your business will be prepared come next April.
To use a "lite" version of the apprenticeship levy calculator absolutely free, visit our online shop.