Apprenticeship Levy 0.5%

Apprenticeships are a great way to unlock and develop talent in any organisation. The apprenticeship levy has changed the way employers access, and training providers deliver apprenticeships.

We realise this may all be new to you, and you may have a lot of questions… feel free to contact us and we would be delighted to help. Alternatively below is a list of frequently asked questions that may help.

Q. What is the levy?

A. The levy is a new tax created to fund new apprenticeships in England as part of the Government’s plan to increase the quality and quantity of what is offered. It came into effect in April 2017.

Q. Who has to pay?

A. All UK based employers with a wage bill in excess of £3,000,000. The amount payable currently is 0.5% of the amount above £3m. For example, an employer with an annual wage bill of £4m would currently pay £5,000 (£4m – £3m = £1m x 0.5% = £5,000).

Q. How is it paid?

A. It is collected by HMRC through the PAYE system. It then accumulates in your apprenticeship account to be used to purchase training with approved training providers.

Q. What does it cost?

A. The Government limits the amount that can be spent on training on a single apprenticeship by the use of funding bands. These can differ depending on the level of the qualification and the duration of delivery.

Q. What can the levy be spent on?

A. Levy funds can be used to purchase training for existing and for new staff, providing that they meet the Government’s eligibility criteria and that the training delivered must meet an approved standard or framework. Funds cannot be spent on salary, travel or any other associated cost.

Q. Are there any incentives offered?

A. Employers in England who pay the levy currently receive a 10% top up to their funds.

Q. How long do I have to use my funds?

A. Funds expire two years after they enter your account unless they have been used.

Q. What happens if all the funds are spent?

A. Additional training can be purchased on a co-investment basis. Your contribution is 10% and the Government will fund the remainder.

Q. What happens in the rest of the UK?

A. The levy is UK-wide so you still pay based on your overall wage bill. You can only purchase training for staff whom live in England as Wales, Scotland and Northern Ireland currently have their own arrangements to support employers with apprenticeships.

To find out more about how we can help your business, please contact us