The following item has been replicated from the October Finance Bulletin:
The UK Government introduced the Apprenticeship Levy on 6 April 2017. The Levy requires all employers operating in the UK, with a pay bill over £3 million each year, to invest in apprenticeships. Employers in England who pay the Levy, which include the University, are able to access funding through a digital apprenticeship service account which enables them to select and pay Government-approved training providers for apprenticeship training. The levy is charged at a rate of 0.5% of an employer's pay bill.
Due to limitations in system functionality, exported payroll costs from CoreHR to Oracle have previously excluded the cost of the Levy and for departmentally funded staff this charge has been met centrally. For externally funded projects, the Research Accounts Team calculate the apprenticeship levy by person and project and charge it manually to all eligible projects on a monthly basis.
As part of the forthcoming upgrade to the CoreHR system, the University will adopt standard functionality to export payroll costs from CoreHR to Oracle. This brings benefits as the standard functionality will receive legislative changes more promptly and with a lower implementation risk.
This change in the interface between CoreHR and Oracle now allows the Finance Division to charge the Apprentice levy automatically to the same code in Oracle as the payroll cost from October 2020.
Budgetary Implications for 2020/21
The cost of the Apprenticeship Levy relating to departmentally funded staff will be met from local budgets from October 2020. The Budget & Forecasting Tool (BFT) will be updated to reflect the change from the Q1 forecast onwards. It will, therefore, add the cost of the Apprenticeship Levy to forecast staff costs to reflect the charge to departmental accounts. There will be no retrospective adjustment for August or September 2020.
Externally Funded Research
Where a research funder will not pay the Apprenticeship Levy, Research Accounts will process an adjustment posting the ineligible Levy to the GL account **0000-51430. Departments will need to take care when transferring personnel costs between projects, depending on the eligibility rules of different funders with regards to the levy.
The department is responsible for journaling eligible Levy to a project when personnel costs have been transferred from a project where the costs are ineligible to one where they are. However, when the reverse occurs and costs are transferred between a project where the costs are eligible to where they are not, Research Accounts will undertake the required journal to remove the costs at the next financial reporting deadline for that funder.
Funding for Apprenticeships
While the Levy will ultimately represent an additional cost to departments, it also provides opportunities to fund professional training for existing staff in a wide variety of roles, as well as new entrant apprentices. Further information on how to access funding for training and apprenticeships can be found at https://www.apprenticeships.ox.ac.uk/.