You may know what the apprenticeship levy is, but are you aware of how to fully use it to your advantage? If your organisation is a levy payer, you have access to a powerful solution that can future-proof your workforce.
In this blog post from Damar Training, we’ll teach you how to use the apprenticeship levy effectively so that you can truly make the most out of your investment.
What is the apprenticeship levy?
Put simply, the apprenticeship levy (now called the growth and skills levy) is a tax paid by large UK employers that have a payroll over £3 million. Employers will pay 0.5% of their total pay bill into a digital account, which can then be used to fund approved apprenticeship training for their staff.
We’ve got more information in our blog post: What is the Apprenticeship Levy?
What happens to the unused apprenticeship levy?
Did you know that in the last year, around £600 million of apprenticeship levy went unspent?
There is still a substantial opportunity for levy-paying employers to maximise their apprenticeship funds. Currently, employers have up to 24 months to spend the levy before it is passed over to HMRC to be used for other costs. In August 2026, this time limit will be reduced to 12 months, meaning that levy-paying employers are going to have to prepare more effectively and act quickly.
How to use your apprenticeship levy: Strategic approaches
Remember, the apprenticeship levy is much more than just a tax. It is an opportunity to invest in, train and upskill new or existing employees with some of the best industry-leading programmes. The key to spending your levy effectively is to identify what your business needs and how best to fill any skills gaps. In order to do this, you’ll want a clear and effective long-term strategy.
Here are some things we’d suggest:
- Conduct a skills audit: Understand where your skill gaps are and where they will be in 5+ years. Take into account your current workforce demographics, for example, an ageing population.
- Embed apprenticeships into your workforce development strategy: Instead of viewing apprenticeships as something separate from your workforce goals, include them as part of your broader strategy and objectives.
- Get senior leadership buy-ins: Do your current leaders understand the benefits of apprenticeships? Ensure your leadership team is bought into the impact that apprenticeships can have on the whole organisation.
- Consider apprenticeships for the whole workforce: Apprenticeships aren’t just for recruitment or entry-level roles. With programmes available up to level 7 for senior and specialist roles, apprenticeships can be an effective tool for upskilling existing staff.
- Measure your successes: A key feature of apprenticeships, compared to stand-alone courses, is that they have a real and long-term impact in the workplace, so make sure you’re measuring key metrics to demonstrate ROI.
- Consider levy transfers: If you’re still struggling to use all of your levy, consider gifting some of your levy to SMEs who are in your supply chain or the local community.
Think about how you communicate about apprenticeships to your wider business. Are line managers aware of what’s available so they can discuss with their teams as part of progression planning and formal reviews? Are you able to promote the apprenticeships you offer across the organisation – using your intranet, newsletters, conferences or other channels?
This will also help to promote a culture of learning and development in your business.
Immediate actions to take
Understanding apprenticeship funding and trying to implement an immediate strategy doesn’t have to be difficult! As you work on a longer term strategy, here are some things you can do straight away to start using your levy more effectively:
- Check your balance: Log in to your apprenticeship service account and see exactly how much you have available and when funds are due to expire
- Identify quick wins: Look for existing employees who could benefit from apprenticeship training in the next six to 12 months
- Partner with quality providers: Work with training providers who actually understand your sector and can help you design apprenticeship training programmes that deliver real business value – find out how to choose the right apprenticeship provider.
What about if you want to spend more?
When you’d like to benefit from more apprenticeships than your account will currently fund, you will follow a ‘co-investment’ model. This is where the government funds 95% of your apprenticeship training and assessment costs, and you pay the other 5%. In the November budget, it was announced that government co-investment for levy payers would reduce from 95% to 75% from August 2026 so it’s important that organisations maximise the opportunity now.
Payment incentives for employers
As well as the levy, there are other ways to access funding for apprenticeships. If you take on an apprentice aged 16-18 (or aged 19-24 and have been in care / have an Education, Health and Care Plan), you’ll receive £1,000 to help with additional costs. This is known as the apprenticeship incentive payment.
Maximise your levy with the help of Damar Training
Hopefully, this blog post has given you some ideas on how to use the apprenticeship levy more effectively. By viewing it as an investment in your people and future, rather than a cost, you can unlock the real potential of your future workforce.
Here at Damar Training, we’ve been helping organisations to navigate business and professional training for 45 years. Our expert team can guide you through the funding rules, and show you the return on investment that other organisations have gained from taking a strategic approach to apprenticeship training.