What is the apprenticeship levy?

The apprenticeship levy is an amount paid by large employers with a payroll of more than £3 million per year. It is charged at 0.5% of the wage bill and deducted monthly through PAYE and is paid by around 2% of all employers. All levy-paying employers receive a £15,000 allowance annually which is offset against their total levy amount. The levy is applicable to any UK business, in any sector. It aims to improve the quality of apprenticeships and encourage more employers to take on apprentices.

More information on who pays the levy and how to work out what you owe can be found here.

What can the levy be used for?

Levy funding can only be used to invest in the approved training and assessment costs of an apprenticeship, up to the funding band maximum. It is to support employers to take on new apprentices or to upskill existing staff.

Through the apprenticeship levy, you can access hundreds of different types of apprenticeships to train people for a huge variety of jobs. There are apprenticeships at different levels, starting from GCSE-equivalent apprenticeships through to degree apprenticeships.

What can’t the levy be used for?

Levy funds can’t be used to pay apprentice wages, for ‘top-up’ qualifications, or qualifications that are not already approved as part of the apprenticeship.

How do I find out if my company is already paying the levy?

The best thing to do is speak to the person in your organisation who is responsible for finance. If your company is eligible to pay it, then you will be paying it.

How do I access my levy funding?

Your funding is held digitally. You can access it through an apprenticeship service account. You will need to create an account if you don’t already have one. Again, check with other departments in your organisation first just in case your organisation already has one. Good places to check – finance, learning and development, HR, or any external accountants and tax advisers.

Preparing to set up an apprenticeship service account.

Before you can create your account, you will need:

  • a GOV.UK One Login account linked to an email address you use for work – you can create this at the same time as creating your apprenticeship service account
  • the Government Gateway login for your organisation
  • authority to add PAYE schemes to the account
  • authority to accept the employer agreement on behalf of your organisation.

Setting up an apprenticeship service account

You’ll need to log in to your GOV.UK One Login account. From there you can set up your apprenticeship service account.

This short video shows you how. You can also read more about it here.