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How does the Apprentice Levy work in Northern Ireland

Posted in : Seamus Says - Employment Law Discussion on 5 January 2018
Seamus McGranaghan
O'Reilly Stewart Solicitors

"Could you give us some information on how the apprenticeship levy works in Northern Ireland? I understand there is no online accounts system to bank and drawn down contributions. So what's new about apprenticeships in Northern Ireland?"

Keywords: Apprenticeship; Contributions; Position in NI

We're going to look now at apprenticeship levy. I hope you haven't forgotten about that question there on wages. We haven't dealt with any apprenticeship levy questions. We've got a couple in here that came in. "Could you give us some information on how the apprenticeship levy works in Northern Ireland? I understand there is no online accounts system to bank and drawn down contributions. So what's new about apprenticeships in Northern Ireland?"

Seamus: There is a distinction between what happens in England and what happens in Northern Ireland. I can understand why someone would have a query about it. So just to run through this quickly, the Levy for all employers, they have to have an annual wage bill of more than £3 million or if they have that, they have to then pay not 0.5% of their staff costs into what's called an apprenticeship fund. So the money goes into the fund and then the debate is what happens with the fund after that.

So, essentially, businesses can then draw down on the fund and the government top of the fund as well. That leads to finance trailing. Employers with a pay bill of [less than] £3 million don't have to contribute to the levy, but they can still have access. If they want to have access to schemes or training, they can do that. It's collected by the treasury, but use of the funds . . . so, in England, what happens is that the companies have access to what they call the digital voucher process and it really is dependent upon what they put in as to what they get out. We don't have that system here in Northern Ireland.

Scott: So we get taxed in Northern Ireland. It goes into the treasury. It goes into the dirty big bowl and it doesn't come back because there's no Stormont.

Seamus: Exactly. I can certainly understand people's frustrations with that. Here, we're funded by the Department of Economy for it. Apprenticeship NI is the primary development program that we have. It's used for upscaling staff and for supporting career progression, things like that.

The problem is there was a secondary question in terms of the targets in public sector and everything else. Essentially, we don't have them here in Northern Ireland. We're paying into it and we're not getting a huge amount out of it is the difficulty we have at the minute, but hopefully things will move forward and that will be rectified shortly.

This article is correct at 05/01/2018
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Seamus McGranaghan
O'Reilly Stewart Solicitors

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