Apprenticeship Levy

Apprenticeship Levy: what you need to know

The government is changing the way Apprenticeships are funded from May 2017. A new Apprenticeship Levy scheme will be introduced which will affect larger employers but there will also be changes to the funding for apprenticeship training for all employers.

Who is liable for the Apprenticeship Levy?

Employers, of any sector, with a pay bill of more than £3 million each year. The levy will have to be paid directly to HM Revenue and Customs (HMRC) through the PAYE process. This will start on 6 April 2017.

How much will I pay?

0.5% of your entire pay bill.  However, you will have a levy allowance of £15,000 each tax year to offset against this.
Example: an employer with an annual pay bill of £5,000,000:
•    levy sum: 0.5% x £5,000,000 = £25,000
•    subtracting levy allowance: £25,000 – £15,000 = £10,000 annual levy payment

Top-ups to the funds in your digital account

The government will apply a 10% top-up to the funds you have for spending on apprenticeship training in England. This is applied on a monthly basis, at the same time as the funds enter your digital account.
That means for every £1 that enters your digital account to spend in England on apprenticeship training, you get £1.10.

How will I access money paid under the apprenticeship levy?

Employers will be able to access funding for apprenticeships through a new digital apprenticeship service account.
You will be able to use this to pay for training and assessment for apprentices in England. The service will also help you find training providers who can help you to develop and deliver your apprenticeship programme.
Eligible employers will be able to register an account from January 2017 and apprenticeship funding will be available after 22 May 2017.

What about non-levy paying employers?

If you are a non-levy employer you will still be able to use the new digital Apprenticeship service to find a suitable approved training provider. You can agree a price with the training provider. This price will cover the delivery of apprenticeship training and the cost of assessing the apprentice. You pay for this through co-investment which means that you and the government each pay some of the money to the provider. There will be a rate set each year, for the proportion of the money that you need to pay and the proportion the government will pay.

For full information about the Apprenticeship Levy and proposed changes to Apprenticeship funding visit GOV.UK Apprenticeship Levy: how it will work

We are here to help!
For any queries regarding Apprenticeships or the Apprenticeship Levy please contact us:
Apprenticeship Team
01223 418778


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