Apprenticeship Levy

From April 2017 all employers operating in the UK with an annual pay bill of more than £3m will be charged an apprenticeship levy of 0.5%.  

How much will I pay?

From April 2017 all employers operating in the UK with an annual pay bill of more than £3m will be charged an apprenticeship levy of 0.5%.  The levy is based on the full UK payroll bill and will be used to fund new apprenticeships. If the UK pay bill is less than £3m employers will not be charged the levy. 

The annual pay bill includes all items of pay to employees that are subject to Class 1 NICs and the pay bills of connected companies must be combined to determine if the £3m threshold has been exceeded.

Each employer (or group of connected companies) will receive an annual levy allowance of £15,0000...........£3m. The legislation sets out how connected companies and other affected payrolls can utilise the allowance effectively between them.

How do I pay the apprenticeship levy?

The apprenticeship levy is payable monthly through the RTI system.  If the pay bill changes each month, then the levy amount will also change.

What happens to my payments?

All employers in England who pay an apprenticeship levy will be given a digital account.  From 1 May 2017 they can use the funds in the digital account to pay for new training, education and assessment for employees at all levels and ages.  Employers in England will receive a 10% top-up to their monthly funds, so for every £100 an employer puts in, they will have £110 to spend.  If the funds in an employer’s digital account aren’t enough to cover the costs of training an apprentice the government will pay 90% of the extra cost of training, providing that the employer pays the other 10%.  Registration for the apprenticeship service is now open to all levy paying employers.

Do the funds in my account expire?

Funds will expire 24 months after they enter your apprenticeship service account unless they are spent on apprenticeship training with a training provider. Whenever a payment is taken from the account, the service automatically uses the funds that entered the account first.

Can I access funding if I don’t pay the levy?

If you don’t pay the apprenticeship levy due to the size of your pay bill you will still be able to employ an apprentice.  You will pay a 10% contribution to the cost of apprenticeship training directly to the training provider and the government will pay the remaining 90%, up to the maximum amount of funding available for that particular apprenticeship standard. Additional support is available for smaller employers.