This April, the government introduced the Apprenticeship Levy, which affects all organisations with a playbill over £3 million. It is important to note that the charity sector will not be exempt. This means that if a charitable or not-for-profit organisation does indeed pay out over 3 million, then they will be expected to pay the levy. Furthermore, charitable organisations are required to use the money towards recruitment and training of apprentices.
Essentially, the apprenticeship levy will be a levy on UK employers, paying out over a certain amount, to fund apprenticeships in the future. The aim here is to collect investment from large employers which can be used directly to fund and maintain apprenticeships. The levy will apply to all organisations, whether they are in the private, public or charity sector, but only to about 3% of total employers who happen to have large payrolls.
All employers are liable to contribute, though the levy will only be charged to those with payrolls over £3 million, with a larger threshold for those paying out £6 million or more. The money must then be placed in a secure account specially for funding apprenticeships. The government will then provide £15,000 to offset the cost. Any remaining funds after 18 months will expire, then being made available for other organisations to fund their own schemes. (Phew, I think I made that as simple as possible!)
Charities and not for profit organisations will be impacted by the levy in much the same way corporate companies are. There are no exemptions or exclusions currently in place which stop the levy from applying to the charity sector. Some have concerns over charities funding private sector apprentices, but this has not yet impacted the legislation. The Charity Finance group have written more extensively about this. While larger charities which fall among the 2% of liable organisations will be required to comply with the scheme, a vast majority of charities will not be expected to contribute due to the small size of their payroll. In fact, smaller charities may be eligible for the following support.
Further information on the apprenticeship levy and charity sector