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The Independent Automotive Aftermarket Federation

Employee Training

For all IAAF Members

Would you like to have staff training costs subsidised by up to 90% by the government? Read on for the full story…… 

The new training levy

From April 1st this year you will pay a levy of 0.5% on every £1 over £3M on your annual pay bill. This will be paid to HMRC through your monthly PAYE returns. 

The good news is that HMRC will give you this money back plus 10% 1 month later. 

Sounds good, why are they doing this? 
They want you to spend the money on training apprentices in your business, this is all they will allow you to spend it on.  Any levy that you do not spend will be taken off you by HMRC after 24 months so it is vital that you plan effectively to extract maximum value. 

How do I confirm that I will be a levy payer? 
Go to the below site and enter your relevant company details, this will provide you with a levy guideline figure:

Looks like I won’t pay the levy, what now? 
There are still changes ahead that will affect you so please read on! If your payroll is likely to exceed the threshold at some point in the future, then the information provided here will help you to prepare.

I am a levy payer, what can I spend my money on?
You can only spend it on training and assessing apprentices against a government approved apprenticeship, working in partnership with a government approved Training Provider. 

Who can be an apprentice?
Almost anyone*. 

We tend to think of apprentices as young people, typically 16 years of age having just left school; anyone of any age, in any role can be an apprentice if they need to acquire skills and knowledge that they do not currently possess to be fully competent in their role. So, you can spend your levy upskilling your current staff and training and assessing newly recruited staff in the future; 16 year olds, 46 year olds, there is no limit. But remember, they must follow a government approved apprenticeship and you must work in partnership with a government approved Training Provider.

There are already approved apprenticeship Standards for familiar apprenticeship roles such as Service Technician but many more are also approved that may be of interest to your business; how about Team Leader/Supervisor at Level 3, Operations Departmental Manager at Level 5 or perhaps Digital Business Administrator or Host? 

Go to this site to view a list of currently approved Apprenticeship Standards:

Note: Parts Advisor and Customer Service Advisor Apprenticeship Standards are currently in development and we expect these to be approved soon; ProVQ sits on the Standards committee for these roles.

I will be a levy payer; how do I access and spend my money?
You use a government online account called the Digital Apprenticeship Service (DAS) to manage your levy funds. DAS allows you to forecast your levy payments (over a period of up to 24 months), select approved training providers, manage your apprentice data and view payments, receipts and balances, just like a bank account. 

Watch this YouTube clip to see how this will work:

Which Training Provider should I use?
You are free to select any approved training provider from the list on DAS but we (ProVQ Ltd) are working successfully with the IAAF and it’s membership in this area right now and have a very strong track record and reputation for quality.  

ProVQ currently offer the following apprenticeships:

  • Service Technician (new Standard approved)
  • Parts Advisor (new Standard in development) 
  • Customer Service Advisor (new Standard in development)
  • Leadership and Management at L3 and L5 (offer in development)
Please note that contact details can be found below, should need any help with any aspect of this new process. 

What happens if I am not a levy payer or I spend all my levy?
If you are not a levy payer then the government will share the cost of apprenticeship training and assessment with you; this is called co-funding. The government will pay 90% of the cost of training and assessment, leaving you just 10% to pay. If you are a levy payer and you spend all your levy, the government will co-fund the remaining costs of your apprentice training and assessment, paying 90%. 

If you employ less than 49 staff, the government will pay 100% of your apprentice training and assessment costs. If your business is part of a group then the number of staff is calculated at group level. 

If you are likely to be both a levy payer and ‘co-funder’ of apprenticeships (because you pay a relatively small amount of levy and will spend it within 24 months), forecasting can become complex. The following is a very useful tool to assist with your forecasting:

How much does it cost?
The government are placing all apprenticeships into price bands. At this point the only current relevant apprenticeship programmes that have been banded are Service Technician and Leadership and Management (Parts Advisor and sales is still in development). 

We will use the Service Technician programme to aid understanding of cost and cash flow:

£18,000 per apprentice over the 3 years of the programme
The programme is 23 weeks in duration over 3 years, the apprentice attending training at the ProVQ Training Centre facility approximately every 12 weeks for a 2-week training block. 

This price includes all training at our training centre in Shrewsbury, registration and certification through the Institute of the Motor Industry (IMI) for the 2 Gateway assessments, F Gas and the End-Point Assessment. 

Funding available for other apprentice disciplines will be released as the new Standards are approved and we will communicate with you on these when we are clear.

ProVQ will provide the following services free of charge to apprentice employers when the apprentice is trained by them:

  • Full apprentice recruitment service
  • Personal visits to the employer’s business at least every 12 weeks by a dedicated ProVQ assessor to provide support to the employer and apprentice
  • Additional Learning Needs screening and support i.e. dyslexia and other learning barriers.
  • Support in administering apprentice block release accommodation at the International Hotel in Telford through an online booking facility. We have also negotiated very favourable rates for this hotel
  • Providing a seamless transition for newly qualified apprentices to CPD opportunities
  • A full suite of safeguarding measures.

Although anyone can be a funded apprentice, the government will pay to the employer and to the Training Provider an additional £1,000 each if the apprentice is under the age of 19 years when they start** their programme. This payment is made in 2 instalments - 3 months and 12 months after the apprentice starts** - and the employer receives their share at these points also (if the apprentice is still on programme at both these points). 

How are the payments broken down?

ProVQ will charge 80% of the £18,000 divided across the first 36 months of the apprenticeship programme:  £400.00 per month

They will then charge the balancing 20%, £3,600.00 to pay for the apprentices End-Point Assessment with the IMI. The government have introduced a rule that the final 20% must be retained until the apprentice is ready to complete the End-Point Assessment.

Tell me more about co-funding….
When an employer has spent all of the levy, the government will pay 90% of the cost of apprentice training and assessment, leaving the employer to pay the remaining 10%. If the employer is not a levy payer and employs more than 49 staff, the government will also pay 90% of all apprentice training and assessment costs.  This is how co-funding will look with a Service Technician apprentice:

Cost of apprenticeship training and assessment = £18,000 over 36 months.

The employer will pay £1,800 of this cost.

Payment schedule:

20% of the full £18,000 must be reserved for End-Point Assessment = £3,600
£18,000 minus £3,600 = £14,400
10% of £14,400 = £1,440
£1,440 divided by 36 months = £40.00 per month 
Month 36 (typically) End-Point Assessment cost, 10% of £3,600 = £360.

What happens if my apprentice fails the End-Point Assessment?
ProVQ will provide further support to the employer and the apprentice to help them to meet the required standard at no additional charge. When, through consultation, it is agreed that they are ready to try again, this will be arranged. As the competency of the apprentice is a joint responsibility between the employer, the apprentice and ProVQ as the Training Provider, ProVQ will cover 50% of the End-Point re-assessment cost.

Can I use my levy to pay for apprentice accommodation and travel when attending block release training weeks at the ProVQ Training Centre?
No, the government are strictly controlling what the levy can be spent on and this is apprentice training and assessment only; it cannot be used to pay apprentices wages, training accommodation or anything else that is not apprentice training or assessment. 
The charges for accommodation for the apprentice when attending training with ProVQ are currently £297.50 for a single occupancy room and £199.10 for shared occupancy (2 per room) per week. This is for 4 nights accommodation per week, breakfast and evening meal. Your apprentice will be able to purchase a midday meal and other refreshments from the restaurant at the Training Centre. This charge also includes a return coach service between the Hotel and the Training Centre for each training day.

What about my current apprentices?
For apprentices who have already started an apprenticeship programme, their training and assessment will continue to be funded the same way that it is now; these changes only affect apprentices starting** a new programme after April 1st 2017. 

We are part of a group and we have Centres in Scotland, Wales and Northern Ireland; what happens here?

The levy is a UK wide policy so employers in and across all nations of the UK will pay it. However, the new apprentice funding process is being launched in England only in April 2017; Scotland, Wales and Northern Ireland are yet to release information on how they will use the levy collected from employers. If you are a UK wide employer and a levy payer, this means that you will only receive back from HMRC the England proportion of your levy (plus the government 10% top up), you will not receive anything back for your Scotland, Wales or Northern Ireland contribution. Release of information from these administrations is awaited and will be shared when there is clarity on the policy. The site referred to earlier takes into account all these factors calculating the forecast:

What about VAT?
Government funding is non-vatable. However, if employers falling into the co-funding category will be charged VAT on the 10% contribution. 

The future 
ProVQ are now redeveloping other current adult training programmes and producing new support programmes. Where appropriate they are aligning these to the new Apprenticeship Standards so these can be funded by the training levy or by the government by up to 90%.

I’m busy and this is complex, how do I get help?
ProVQ will be able to assist you with any questions that you may have on this process. 

Visit the website’s funding page:

Alternatively, you can either speak to your ProVQ apprentice assessor, call the support team on 01743 762800 or email Stuart Jones, Director of Training Operations ProVQ:

*ProVQ will be able to advise you on funding eligibility.
** An apprentice starts their programme when the Individual Learning Record (ILR) is dated and signed by the employer and by the Training Provider, ProVQ. This is often some weeks after the apprentice starts employment since formalised education must have started before the ILR can be signed. The employer will be advised on start dates so this can be factored in against the date of birth of the apprentice.

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