Apprenticeship Levy

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The Apprenticeship Levy was introduced after several reports commissioned in recent years by successive governments to make the UK better able to compete with the rest of the world with the pressure for increasing levels of educational and skills attainment.  

The Apprenticeship Funding is spilt into two groups, Levy and Non-Levy.

Employers  in the UK with an annual wage bill of more than £3 million pay 0.5% of their annual pay bill, minus an allowance of £15,000. The Government will then add a further 10% of what is in your account.

This amount is paid into your digital apprenticeship service account, this must be used within 24 months or the Government retain any that is not used.

If however you wish to use more than is paid into the account the Government will cover 90% of the additional amount .

You are also allowed to transfer up to 25% of your annual apprenticeship fund to another organisation to pay for their apprenticeship training within there organisation.

You can transfer any unused funds to those within your supply chain or locality.

Estimate your funding

Estimate if your organisation will pay the apprenticeship levy, how much you could have to spend on apprenticeships and how much the government will contribute towards the cost of training.

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Funding Changes

One of the main reasons previous reforms had failed was due the structure of funding. The vast majority of Skills Funding Agency funding went to colleges who then used sub-contractors to deliver over 80%. This was obviously inefficient with money skimmed off before delivery and the employers not getting the full benefit.

Under the new reforms any business with a pay roll of over £3M in England 0.5% will be deducted at source.

24 months to spend the levy – i.e April 2017 contribution must be spent by April 2019.

However, each employer will receive one annual allowance of £15,000 to offset against their levy payment. Levy-payers will also receive a 10% monthly top-up into their digital levy account to spend on training. There will be a connected person’s rule, similar to employment allowance connected persons rule, so employers who operate multiple payrolls will only be able to claim one allowance. So for every £1 an employer pays in, they can draw down £1.10 to spend on apprenticeship training through their digital account


A company with a payroll of £3m would need to make a levy payment of £15,000. But there is an offset of £15,000 so that in practice only companies with a payroll of over £3m will pay anything.

There is a £1000 incentive paid for any 16-18 year old apprentice taken on, paid in two halves paid at 3 months and 12 months.

A lot of employers are unaware that since April 2016, apprentices under the age of 25 have been exempt from employer National Insurance contributions. This can offer a significant saving for employers – just one more benefit of employing an apprentice!


The new Apprenticeship Standards? 

These Standards have been developed by a number of groups of employers and the early pilots were called ‘Trailblazers’.  All of the existing Frameworks will be replaced by new Standards by 2020, ensuring better delivery across the UK.

What is different about the new Standards?

They are being developed by employers, rather than the government, meaning that the training that will be delivered will be higher quality and that more relevant skills will be taught throughout industries. The standards are being designed to ensure successful development of all areas within Apprenticeships. Gearing Apprentices towards achieving the specific skills for the company that they work for means that once they have completed their course, they will be a fully competent and productive employee.

Benefits of the new Standards
  • Gives employers control in designing Apprenticeships
  • Increase the flexibility of delivery
  • Simplifies the funding system
  • Increase the effectiveness of training

20% off the job

As well and the flexibility and funding there has been one added restriction added to apprenticeship training.

Off-the-job training is defined as learning which is undertaken outside of the normal day-to-day working environment and leads towards the achievement of an apprenticeship. This can include training that is delivered at the apprentice’s normal place of work but must not be delivered as part of their normal working duties. The off-the-job training must be directly relevant to the apprenticeship framework or standard and could include the following:

  • The teaching of theory (for example: lectures, role playing, simulation exercises, online learning or manufacturer training)
  • Practical training: shadowing, mentoring, industry visits and attendance at competitions.
  • Learning support and time spent writing assessments/assignments.

Off-the-job training does not include:

  • English and maths (up to level 2) which is funded separately
  • Progress reviews or on-programme assessment needed for an apprenticeship Off framework or standard
  • Training which takes place outside the apprentice’s paid working hours

How to sign up for a digital account

The first stage is to sign up for your levy account, then this needs to be managed and completed on a monthly basis. If you employ seasonal staff or pay bonuses the levy will balance out of the 12 month period. Find out more

The Genius Managed Service

We are able to offer a fully managed service from delivering the apprenticeships we are experts in to procuring and managing other delivery partners ensuring maximising the levy fund and ROI in line with your business needs. We can work with your learning and development team to map across current training and complete the monthly levy return. Find out more

Funding Options

Since April 2017 the way in which apprenticeships are funded has changed and is based on how many employees and the size of your pay role.

However whatever the size of your organisation we will advise you on how you will get the maximum benefit for your organisation.

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