Apprenticeship Levy Explained

Everything you need to know about how employees can maximise the apprenticeship levy to benefit their staff and wider organisation.

What is the Apprenticeship Levy?

The Apprenticeship Levy is a UK tax on employers which can be used to fund apprenticeship training. This presents great opportunities for employers to grow and develop their workforce.

All employers with a payroll of more than £3million per annum are required to pay an Apprenticeship Levy of 0.5% of their company payroll in order to fund apprenticeship training. Employers have an allowance of £15,000 per year to offset against their levy payment.

This levy payment is placed in a designated account (Direct Apprenticeship Service) which can then be accessed by that employer to fund apprenticeships.

Benefits of the Apprenticeship Levy for Employers

The Apprenticeship Levy allows organisations to take on an apprentice or provide existing staff with the opportunity to develop new skills and gain new qualifications to carefully meet the demands of your business.

Apprenticeships are a cost-effective way to fill a skills gap within your team and organisation and build an accomplished and qualified workforce.

We work with Levy and Non-Levy paying companies in all sectors and can help you plan and organise your apprenticeship funding.

Large Business :

If you are an employer who has a UK pay bill exceeding £3M you will be required to pay an apprenticeship levy of 0.5% of your total annual amount which will be payable to the HRMC through the pay as you earn system (PAYE). Employers who are required to pay the levy will have access to funds they have paid in via a new online portal called the Digital Apprenticeship Service (DAS). They will also receive a 10% top-up from the Government to their total monthly contributions in England. Any training must be provided through an accredited provider.

Small Business :

If you are an employer who has a UK pay bill of less than £3M you will contribute just 5% of the cost of apprenticeship training and the government will ‘co-invest’ by paying the remaining 95 per cent. Businesses who have less than 50 employees won’t pay anything if they employ apprentices under the age of 19, and will receive a £1,000 payment.

Off the Job Training

It is now a requirement for an Apprentice to spend 20% of their time at work completing off the job learning. This is the equivalent of a day a week. We work with you to ensure that this time is planned ineffectively with suitable training courses, online learning and workshops mapped throughout the Apprenticeship to deliver positive outcomes that will have a real impact on your business goals.

Partners in Training