Here at Perrys Accountants we participate in apprenticeship schemes and have first-hand experience of the benefits it provides.
Apprenticeships have been proven to be one of the most cost-effective ways of employers training their staff to the level of skills which are specific to their business.
This article provides more information on apprenticeships and how you can use these to your business’ advantage.
What are apprenticeships?
Apprenticeships provide paid employment, with the additional benefit of gaining qualifications to individuals over the age of 16, who are not in full-time education. Apprenticeships can be offered to new employees or existing employees to widen the knowledge and skills available to the corporation.
How do they work and how are they funded?
Apprenticeships are government schemes in which employers can apply, with a variety of different industry schemes and levels available. The government will pay up to 95% to the employer towards the apprentices’ training and assessment costs.
Most employers will need to pay 5% of the training costs directly to the provider, with the government paying the 95% remaining directly to the provider also.
Some employers may also receive an extra £1,000 for taking on an apprentice if they are one of the following:
- 16-18 years old.
- 19-25 years old, with an education, health and care plan.
- 19-25 years old and they were previously in care.
The £1,000 will be paid in two instalments, with the first being made within 90 days and the second payment after a year.
The apprentice will be entitled to 20% off-the-job training with an independent training provider during their normal working hours.
On the job training would also be provided by existing employees, in which their knowledge can be passed down through the workforce.
If the employers’ annual pay bill exceeds £3m, they will need to pay Apprenticeship Levy at a rate of 0.5% on their annual pay bill, which is to be reported and paid through a company’s Employee Payment Summary. Employers have a £15,000 annual apprenticeship levy allowance, which is used to reduce their liability, with unused allowances not being transferrable between years.
What are the benefits?
The cost to most employers is 5% of the training costs, plus the wage of the apprentice.
Trained staff are an asset to a business as the apprentices will be gaining skills and knowledge which will be beneficial in the overall quality of the work and improve their performance within their role.
Staff will be more motivated within their role and will therefore help to improve productivity.
Apprentices are more likely to stay with the firm until the end of the apprenticeship is complete since they will receive recognised qualifications at the end. The relationship between the apprentice and the employer can quite often result in the continuation of employment after the apprenticeship.
If you are interested in providing apprenticeships for your staff, you can find further information at https://www.gov.uk/employing-an-apprentice .
As we have experience with our own apprenticeships, if you would like a general chat about this then please give your loan Perrys office a call.