Employer Co-Investment for 19+ Apprentices

By Tricia

June 2017

June 2017

By Tricia

The most important feature of the Reform of Apprenticeships programme is the involvement of employers in the development and running of the new system. The new standards are designed by employers, they are overseen by employers and through a new tax called the Apprenticeship Levy, they are paid for by employers – but only by those with annual wages of £3 million plus.

Unlike employers in large firms, employers in small and medium-sized enterprises (SMEs) may not have to pay anything for apprenticeship training. In fact, there are incentives available for taking on 16-18-year-olds, SMEs are given a grant for £1,000 for each apprentice they employ.

The only situation where a SME employer must ‘co-invest’ is when they take on an apprentice who is 19 or older when they first start the programme. For each 19+ apprentice the employer must pay 10% of the cost of the apprenticeship training, for Level 2 apprentices this is £900 plus VAT and for Level 3 advanced apprentices, this is £300 plus VAT.

The first reaction of many employers is to consider taking on 16-18-year-olds only, however, 16-18’s are in great demand and there may not be enough of these to go round!  We would also point out that 19+ learners complete the programme much more quickly than younger learners and, importantly, there is a much smaller drop out of 19+ learners from the programme.