Apprentices: Taxation

(asked on 6th July 2020) - View Source

Question to the Department for Education:

To ask the Secretary of State for Education, what steps he is taking to ensure Apprenticeship Levy funds can be used to support (a) current and (b) future construction apprentices after the covid-19 outbreak.


Answered by
Gillian Keegan Portrait
Gillian Keegan
Secretary of State for Education
This question was answered on 14th July 2020

Apprenticeships will be key to our recovery, especially for young people. We are looking at ensuring that we support employers, especially small businesses, to take on new apprentices this year and will provide further details in due course. The apprenticeship levy is an important part of our apprenticeship reforms, supporting employers of all sizes to make a long-term, sustainable investment in training. We will ensure that there is sufficient funding to support small businesses wanting to take on an apprentice this year.

We recognise that employers, at the moment, face increased challenges with hiring new apprentices and so we will introduce a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. Details can be found here https://www.gov.uk/government/organisations/hm-treasury.

We are developing a campaign plan to underpin our work on supporting the recovery and getting redundant apprentices back to work. As part of this campaign we will be working with all the largest construction businesses to ensure they can restart and recover as quickly as possible. This will include encouraging the sector to take on redundant apprentices from other employers both inside and outside of construction.

In light of the challenges presented by COVID-19, we have extended the transition of non-levy paying employers onto the apprenticeship service from 1 November 2020 to 1 April 2021. Under the new system, smaller employers will have more control over the funding they use to create new apprenticeship opportunities and can reserve funds before choosing the provider that best meets their needs. Levy-paying employers can transfer up to 25% of the annual value of funds in their apprenticeship service accounts to other employers. Employers can continue to recruit and train apprentices. They already have 24 months in which to spend their funds before these expire.

We want apprentices and employers to continue with their apprenticeships and have introduced a range of flexibilities to make this easier, while maintaining the quality of apprenticeships. Flexibilities include encouraging remote delivery of training and allowing changes to end point assessment, as well as introducing additional flexibility to allow furloughed apprentices to continue their apprenticeships and undertake end point assessments.

Employers are developing new apprenticeships standards, allowing them to spend the levy on the apprenticeships training that matters for them. There are now 86 construction standards that have been designed by employers across a range of levels to meet employer demand to date and a further 12 construction standards that are currently in development.

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