The Apprenticeship Levy Explained

Click Here to check out the Employers Guide

 What is it?

  • This is a tax that was introduced in April 2017.
  • It affects all UK organisations with a PAYE wage bill of £3m or more.
  • If that applies to your organisation, a fee equal to 0.5% of the payroll is currently being collected monthly from your business by HMRC.
  • Funds collected are credited to your online levy account.

The Government is committed to developing vocational skills and to improving the quality of apprenticeships putting employers at the heart of the system.

There are still some developments on the horizon from the Department of Education which we will feature here as soon as available.

 How to use your Levy fund

The government’s idea is that you recover some of what your business has been taxed by training apprentices.

As a specialist training provider of IT and digital apprentice programmes, we have years of experience providing tech talent acquisition and training services to all kinds of employers.

Placing apprentices in your IT and digital teams is not only funded by this tax but also provides a great opportunity to upskill existing staff and ensure teams keep pace being trained in the latest technology and processes to support business operations development.

Training staff using an approved apprenticeship training provider to complete relevant apprenticeship ‘standards’ is an effective way to not only recover your levy but potentially recoup more than your organisation paid in.

 The Rules

  • Funds in your account can only be used to pay for training and assessment for apprentices that work at least 50% of the time in England.
  • Funds cannot be used to pay for associated costs eg wages, statutory licenses to practice, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme.

Review the apprenticeship funding rules for full details of what you can and can’t pay for with funds from your apprenticeship service account.

If you prefer you can contact us directly and we will be happy to provide a clear explanation from our experience working with other businesses.