Apprenticeship funding: PAYE or direct credit

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Apprenticeships are an increasingly important part of the government’s long term plan for improved workforce development and enhanced productivity in the UK, explains the CIPP’s Diana Bruce.

They are keen to increase the number of apprenticeships and not just for the lower grade qualifications, but right up to Master’s level. 

Giving employers direct control over the funding for the external training of their apprentices, so that they can drive up its quality and relevance, completes the apprenticeship reform picture. Building on the results of the government’s funding consultation last summer and their subsequent decision to route apprenticeship funding directly to employers, in March of this year they published a funding reform technical consultation - The Future of Apprenticeship’s in England.

The government confirmed in this consultation that responsibility for funding will pass to the employer and that HMRC will be responsible for delivering the funding payments. The two options considered in the consultation for directing apprenticeship funding through employers are:

1. Through the PAYE system and real time reporting submissions; Employment Payment Summary (EPS)

2. Through a direct ‘apprenticeship credit’ model; an online account that employers and government can contribute into

The CIPP along with the AAT and the CIPD jointly...

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  • PAYE model
  • Key findings from survey on PAYE model
  • Insufficient PAYE liabilities to deduct from monies due to HMRC
  • Key findings from survey
  • Apprenticeship credit model
  • Key findings from survey
  • Conclusion

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