31 May 2017

Apprenticeship Levy in Scotland: Now you see it, now you don’t

The Apprenticeship Levy means different things to businesses in England and Scotland – what’s the impact on Scottish businesses?

When is hypothecation not hypothecation?

With regards to the recently introduced Apprenticeship Levy, the answer to the above question is ‘if you own or run a business in Scotland, Wales or Northern Ireland’.

The Apprenticeship Levy of 0.5% was introduced in April for large businesses with a payroll exceeding £3 million. It was introduced as part of the UK Government’s drive to train three million new apprentices by 2020 and to increase the focus on employee training outside the workplace.

Alongside this, the Government introduced a new digital apprenticeship service account, allowing businesses to match the cost of the Apprenticeship Levy with the utilisation of it in terms of apprenticeships. Think of it like a piggy bank – money in, money out. Employers in England who pay the levy will be able to access the new digital apprenticeship service account, and then reclaim the levy contributions as digital vouchers to pay for apprenticeship training and assessment, or to post apprenticeship vacancies.

However, in Scotland (as well as Wales and Northern Ireland), adult education is a devolved power. This means employers are often putting money into the piggy bank, with no way of gaining access to the pot of money. Skills Development Scotland (SDS) currently administers the fund through contracted training providers and direct employer contracts, and they will continue to carry out this devolved responsibility for some time.

So, for a Scottish Business, the Apprenticeship Levy is just another additional overhead, which will have no direct impact on the business.

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