Apprenticeship Levy

In 2017, the government changed the way apprenticeships were funded and introduced the Apprenticeship Levy. Although it is aimed at large businesses, all were affected by the introduction of the levy.

Levy paying businesses

All businesses with a wage bill of £3million or above are classed as levy paying businesses and will:

  • Be charged at 0.5% of their wage bill including all earnings that are subject to class 1 National Insurance contributions.
  • Be allocated a £15,000 Levy Allowance, so the business will pay 0.5% of their wage bill minus £15,000.
  • Have a 10% top-up to the fund deposited into your apprenticeship service account by the government.
  • Be offered an incentive payment of £1,000 for employing an apprentice aged 16-18.
  • Pay the levy directly to HMRC through the PAYE process. Funds will be credited into the Digital Apprenticeship Service (DAS).
  • Since April 2018, levy-paying employers are allowed to transfer funds to other employers, through the apprenticeship service. Transfers can be made to any employer, including smaller employers in their supply chain, and apprenticeship training agencies. Levy-paying employers will can transfer up to 10% of the annual value of funds entering their apprenticeship service account.

Non-paying businesses

Businesses with a wage bill under £3million are classed as non-levy paying and will:

  • Be required to pay 5% towards the cost of training, the government will pay the remaining 95%.
  • Be offered an incentive payment of £1,000 for employing an apprentice aged 16-18. If you have less than 50 employees then you may qualify for fully funded apprentices (aged 16-18).

Contact the Business Development Team to discuss how we can help you to maximise your return on investment:

Telephone: 01226 216 166

Last updated: 9th August 2019