Apprenticeship levy
The apprenticeship levy is a form of taxation designed to help companies offer more apprenticeships. It was introduced by the UK government in April 2017 for all employers paying a wage bill of more than £3 million per year.
We can help you understand the apprenticeship levy and unlock the funding available. We offer a one-stop service to navigate the funding arrangements.
If you’re an employer with a pay bill over £3 million a year, you must pay the apprenticeship levy which is at a rate of 0.5% of you annual wage bill. Employers with a pay bill of less than £3 million a year will not need to pay the levy. The levy is paid and collected through HMRC.
In England*, the government will top up employers’ levy with an extra 10%, paid directly to employers’ apprenticeship accounts.
Businesses can use this funding for apprentices.
Contact us to find out more about the apprenticeship levy works and how you can get access to funding.
The levy funds can be used for approved apprenticeship programmes that meet employer-approved apprenticeship standards.
The training can be used for existing staff or new recruits who meet the eligibility requirements.
The levy rate is 0.5% of the total wages bill for employers (in all sectors and industries) who have a total employee pay bill of more than £3 million a year.
Find out when you have to pay the apprenticeship levy and how to work out and report your payment on the GOV website here.
If you contribute to the levy, you will be able to see how much funding you have available for apprenticeship training through your current Government Gateway account. Log in to your account and add the details for the PAYE scheme you will use for your apprenticeship. You will then be able to manage your apprenticeship by adding apprentices’ names and quickly and easily authorise training provider payments.
We can help you navigate this process. Contact us to find out more!
Every apprenticeship standard and framework is placed in a funding band, which sets the maximum amount of funding that can be used towards training costs over the length of the apprenticeship. The same funding bands will apply to all employers paying for apprenticeships.
The government is encouraging employers to support young people in quality apprenticeships by providing additional funding incentives:
- To offset the levy contribution, the government provides an allowance of £15,000 to levy-paying organisations
- If you employ a 16 to 18-year-old apprentice, you will receive £1,000 to help meet training costs
- The £1,000 payment also applies if you employ a 19 to 24-year-old apprentice who was formerly in care or has an Education and Health Care Plan
- If you employ someone 19 years or older, the government will contribute 90% of the training cost
- Those employers who contribute to the levy benefit from a 10% top-up to their Digital Service Account
- If employers use up all of their levy funding pot, they only need to co-invest 10% for additional apprenticeship training, the government will fund the balance of the training cost
- Employers with a wage bill of less than £3 million do not contribute to the levy but are required to co-invest 10% of training costs with the government funding the balance
Employers with a pay bill of less than £3 million a year will not need to pay the levy, and they will receive government support with the training costs.
Since 1 April 2019, non-levy-paying employers pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.
All apprenticeships that started before 1 April 2019 will continue at the previous co-investment rate of 10%.
Where can I find out more?
To find out more about how much you will be able to spend on each apprenticeship and how the apprenticeship levy can help your business, read the following information:
If you have any further questions about the apprenticeship levy, please fill in the form below.
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