Came into effect on 6th April 2017
What is the apprenticeship levy?
The Apprenticeship Levy was introduced in April 2017 to help fund apprenticeships.
While the funding and delivery of apprenticeships is devolved across the UK, paying the levy is a UK-wide policy. This means that authorities across the UK independently manage how apprenticeship programmes are funded and do not all support access to the levy for employers. Whether you contribute or not, we’re here to give guidance on the Apprenticeship Levy funding rules for employers seeking to utilise the scheme.
The apprenticeship levy explained
If your minimum pay bill as an employer is greater than £3 million, you need to pay into the levy
Those with a total annual pay bill of less than £3 million pay just 5% of the apprenticeship training
RoATP success – GTG is on the Register of Apprenticeship Training Providers
You have 24 months to use the levy
How is apprenticeship levy calculated?
If your minimum pay bill as an employer is greater than £3 million, you need to pay 0.5% of your total annual pay bill into the levy. You can use the guidance from the government website to work out what you owe.
Opens in new window Find out moreHow can an apprentice benefit my business?
- The average apprenticeship can deliver productivity gains of over £10,000 per annum
- There's funding available to support you and your apprentices
- Apprentices bring in fresh ideas and energise other employees
- Apprenticeships result in a skilled and loyal work force
- The best part? You will have helped someone learn new knowledge and skills while reducing the risk of building up student debt and contributing to the economy and society
Did you know?
We also offer a free consultancy service to help both levy and non-levy paying employer partners. We can help you identify skills gaps in your business and recommend changes to help you improve productivity. If you would like to know more, contact us here.
FAQ
- If your minimum pay bill is greater than £3 million, you need to pay 0.5% of your total annual pay bill into the Levy.
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For those based in England with a total annual pay bill of less than £3 million, they will co-fund a small percentage of the cost of their apprenticeship training and the government will pay the rest.
The funds can help businesses pay for eligible apprenticeship training and assessments in England.
Employers who meet the criteria, via their PAYE submissions.
No, the levy is only paid by employers who fall under the criteria.
Employers have 24 months to use their funds; after this period, their funds will expire. Funds are removed from the employer’s digital account on a FIFO basis as the 24-month expiration date arrives: first in, first out.
Levy-paying employers have the option of transferring a percentage of their annual funds to other non-levy paying employers within their supply chain to support existing apprentices complete their training. More guidance can be found here.
Yes, they can. Levy funds can be used to upskill your existing staff, but only in a new role whereby there is an approved apprenticeship programme that will provide new knowledge, skills and behaviours in England. Other UK nations do not currently support access to the levy for apprenticeships, or upskilling.
In England, levy funds can only be accessed by partnering with an approved training provider, college, university or registered end-point-assessment organisation. Scotland, Northern Ireland and Wales have a devolved policy for how apprenticeships are funded. Employers cannot use levy funds for the cost of training other employees or ineligible apprenticeship training costs, such as travel and accommodation.
If an employer pays the Apprentice Levy but their funds don’t cover the full cost of the apprentice training, additional support is available.
Further support can be found on the government website.
