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THE APPRENTICESHIP LEVY

APPRENTICESHIP FUNDING ADVICE FOR EMPLOYERS

Right now it's an exciting time for Apprenticeships with over 700 different programmes available. They are widely recognised as a superb route into employment but also offer a fantastic opportunity to upskill existing staff members and promote lifelong learning within your workforce with courses up to level 7 (a masters degree equivalent) available. The next steps will be considering the costs. We're here to keep things simple and break down all the information. Let's start from the top...

The Apprenticeship Levy

In April 2017 the Government introduced the Apprenticeship Levy. The levy impacts employers paying a wage bill of more than £3,000,000 per year, requiring those employers to pay 0.5% of their payroll each month as a levy tax. For those employers, this fund can be accessed and used to pay for their training costs associated with the recruitment of an Apprentice. Funds that have been paid into the scheme will expire after 24 months no longer being available to the levy paying employer. 

My Payroll bill is less than £3,000,000, what does that mean for me?

Employers with a payroll less than £3,000,000 do not pay the apprenticeship levy tax. Instead, the Government introduced measures for non-levy paying organisations to be able to access funding for up to 10 employees at any one time to access Apprenticeship training, with the Government contributing 95% of the cost of this training. The remaining 5% must be paid by the recruiting organisation to the training provider of their choice, unless the recruiting organisation has fewer than 50 staff and the apprentice is 16-18 or 19-24 with an EHC or has been in care. 

Is there any support for my organisation if we can't pay the 5% contribution?

Yes! It's highly likely that levy paying organisations will not utilise their full allowance of levy funds before the 24 month deadline. Rather than those funds being released back to the Government, levy paying organisations have the option to transfer up to 25% of their unused funds to another employer or employers through the Digital Apprenticeship Service and their Apprenticeship Service Account. If the amount being transferred covers the full cost of the Apprentice's training, then the non-levy paying receiving employer will not have to pay the 5% contribution.

Is there any other funding support I should be aware of?

The Government offer incentives including: ​

  • £3,000 for recruiting a new Apprentice of any age from 01st April - 30th September.

  • an additional £1,000 if the Apprentice is aged 16 - 18, or 19 - 24 and are either a care leaver or have a Local Authority Education, Health and Care Plan.

These incentives are paid in two instalments after 90 and 365 days of the apprentice being on programme. 

Our experts are on hand to help you with any funding questions you might have. Call us today on 01773 525406 or use our contact form.

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