We can help you maximise your Apprenticeship Levy funds to upskill existing staff and develop fresh talent.

• For apprenticeship starts from May 2017, most apprenticeship funding comes from an employer levy set at 0.5% of UK payroll
• All employers receive an allowance of up to £15,000 to set against their annual contribution. This means that the first £3m of an organisation’s annual payroll is excluded from the levy
• Deductions are taken monthly through Pay As You Earn. The first payment was made in May 2017 by reference to employers’ April 2017 pay bills
• Employers then draw down their levy spend from a new digital apprenticeship account to fund the external costs of apprenticeship training
• If not used, the electronic funds expire after 24 months
• Employers receive an automatic 10% top up. So, a £1,000 levy contribution becomes £1,100 of digital apprenticeship funds
• In calculating UK payroll, groups of companies under common ownership are treated as one
• All UK employers – public and private sector – are in scope but, at present, the levy can only be spent to support apprentices who work in England more than 50% of the time
• Larger public sector employers have a statutory apprenticeship target set at 2.3% of their workforce. Apprenticeships now feature in all public sector contracts lasting over a year and worth more than £10m
• Employers’ NI contributions for apprentices aged under 25 have been abolished

The Apprenticeship Levy refers to the UK government scheme whereby organisations with a payroll of more than £3 million contribute 0.5% of their payroll above that threshold into their Levy pot. The funds in this pot can be used to fund apprenticeship training or they can be gifted to another business but if the electronic funds are not used within 24 months, they will expire.

Private companies and public sector organisations with a payroll of more than £3 million pay into the Levy. It’s important to note that groups of companies with one ownership are treated as one entity. This means that the government will look at the payroll across the entire group in order to calculate whether or not Levy payments are required. 

The Apprenticeship Levy can be used to train new and existing staff. Levy payers can take on new talent to expand their workforce and bring fresh ideas and energy to the business. But they can also use the Levy to upskill existing staff, in order to help them progress in their role, manage new responsibilities and become more efficient.

The Apprenticeship Levy can only be spend on the fundable aspects of apprenticeship training. It cannot be spent on other types of training, the apprentice’s wages, recruitment costs or any other type of costs associated with the business. For Levy payers unable to use all of their electronic funds, they do have the option to gift these to another company or organisation, to support their corporate social responsibility policy, and help their supply chain or local community.

The Levy is paid to HMRC monthly through PAYE, alongside income tax and national insurance payments.  The goverment then provides a top-up of 10% to go into the electronic Levy pot. So if in a particular month, a company pays £1,000 into their Levy account, the government will top this up with an additional £100.