A Guide To The Apprenticeship Levy

What is the Apprenticeships Levy?

The Apprenticeships Levy is a payment that will be collected from large employers in both the public and the private sectors. The levy threshold is calculated by size of payroll. Businesses with a wage bill of more than £3 million will be required to pay a levy. The payment is made to the HMRC through PAYE returns.

The purpose of the levy is to encourage employers to invest in apprenticeship programmes and to raise additional funds to improve both the quality and quantity of apprenticeships.

The Apprenticeships Levy paid by businesses can be accessed through their digital account by those same businesses to fund apprenticeship training in their business.

If a company has less than 50 employees and a salary bill of less than £3m

They will be entitled to:

  • Fully funded FREE training for 16-18 year olds.
  • Funding to train up existing staff or recruit apprentices. 19+ year olds will receive 90% funding.
  • £1000 cash incentive for recruiting an apprentice aged 16-18 year old.

If a company has more than 50 employees and a salary bill of less than £3m

The company will contribute 10% of total costs in monthly instalments.

They will be entitled to:

  • Funding to train up existing staff or recruit apprentices (Even those at degree level)
  • £1000 cash incentive for recruiting an apprentice aged 16-18 year old.

If a company has a salary bill of more than £3m

The company will contribute 0.5% of anything over 3 million salary bill into the Apprenticeship Levy. For every £1 deposited £1.10 will be available to use on training.

They will be entitled to:

  • Train existing staff or recruit apprentices using the funds in digital account. (Unused Funds will expire after 24 months)
  • £1000 cash incentive for recruiting an apprentice aged 16-18 year old.