Apprenticeship funding

The Apprenticeship levy and how to use it

The apprenticeship levy is great for all organisations in England - large and small - that want to invest in skills.

  • Larger organisations already pay into the levy and so most training is 'free'
  • Smaller organisations can easily claim a 95% government contribution to their training
Apprenticeships with KnowledgeBrief

The Apprenticeship Levy

We're a specialist leadership and management apprenticeship provider, working with over 70 organisations to help them make the most of the levy. To make use of the levy scheme, employers need to select an approved training provider and one or more of the many approved courses that are available. The courses are designed by companies working together and are designed with today's business in mind. Why not talk to one of our advisors about whether the scheme is right for you?

The apprenticeship levy was introduced as a government scheme to fund apprenticeships. Apprenticeship levy rules state that employers with a payroll of more than £3 million must pay a 0.5% levy on their total payroll, offset by a £15,000 government allowance. The levy is paid monthly through PAYE. Levy contributions appear in a digital account which can be used by the employer to arrange and pay for apprenticeship training. The funds can only be spent on apprenticeship training or End-point Assessment according to apprenticeship levy rules.

Tailor leadership and management programmes
Apprenticeship funding

Government contributions

Co-investment

The co-investment option is for SMEs and sees employers paying just 5% of apprenticeship course costs, with the government contributing the remaining 95%. This means that non-levy payers pay just 5% of the course price, and this can be spread over the duration of the course. If a levy paying company runs out of funding in their account, the co-investment option is available for them too. Non levy payers are currently able to get funding for a maximum of 10 apprenticeship starts per year.


Government contribution for levy payers

The government tops up all levy payments into your digital account by 10%. As an example, for every £1000 an employer pays into their levy fund, there will be £1100 in the digital account.


Contact us to learn more about government contributions

When did the apprenticeship levy start?

The apprenticeship levy started on the 6th April 2017. Any employer subject to the payroll threshold of more than £3 million would start paying their monthly levy from that date.

When is the apprenticeship levy payable?

All eligible employers will have to pay the 0.5% apprenticeship levy amount at the end of every month. This is collected automatically by HMRC through the employer's PAYE system.

Who can use the apprenticeship levy?

The apprenticeship levy can only be used within England, as apprenticeship legislation differs across the devolved nations. For this reason, apprentices funded by the levy must work at least 50% of their time within England.

Apprenticeship Service

Using the Apprenticeship Levy

The levy funds sit in a digital 'apprenticeship service' account used by employers to fund apprenticeship training provision. The account is used to manage levy funding, track apprentices, find training providers, or transfer unused funds. Any levy funds are topped up each month with a 10% government contribution. Levy funds expire after 24 months - so it's a 'use it or lose it' scheme.

Once a programme and training provider has been selected and a price agreed, your provider will be paid out of your digital account every month. Apprenticeship levy rules state that your levy must only be used to pay for apprenticeship training and End-point Assessment, and cannot be used to pay apprentice wages.


Contact us to learn more about using the service
Tailor leadership and management programmes
Levy transfer

Understanding the apprenticeship levy transfer initiative

This might be smaller organisations in the organisation's supply chain, or charities and other organisations the employer works with or wants to support.

Sending Employers can find Receiving Employers who would benefit from receiving a transfer. For example, this could be:

  • A member of a company's supply chain
  • A charity that is connected to a company
  • A local business
Levy paying Sending Employers can transfer a maximum amount of 25% of their annual funds. They can make transfers to as many Receiving Employers as they choose.
To take part in the scheme you will need to have a Digital Apprenticeship Account set up.
Testimonials

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"We’ve just gone through annual reviews and if I look at ratings from last year to this year, we have more excellent performers in our leadership team."

Coventry and Warwickshire Mind

"As the line manager of a senior team member enrolled in the Senior Leader apprenticeship, I've witnessed firsthand how the functions, skills, study elements, and learning have enhanced the knowledge of the individual. "

ManpowerGroup

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Wiltshire Council

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Wiltshire Council

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AVIS Budget Group

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AVIS Budget Group

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Tata Chemicals Europe

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Flogas

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Talk to us about how to make the most of the levy

If you would like to maximise your use of the apprenticeship levy or just learn more please contact our expert team who would be delighted to help