Understanding how the Apprenticeship Levy works—and how it’s changing—is essential for employers planning their workforce and training investment.
All employers, with a pay bill of more than £3 million, are required to pay the Apprenticeship Levy. You can manage funds using the apprenticeship service and spend it on training and assessing your apprentices.
The government will apply a 10% top up to the funds you have in your account.
If you don’t have enough funds, you just pay 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.
If you exceed the funding band maximum, you’ll need to pay all the additional costs.
Further information regarding the Apprenticeship Levy can be found at the GOV.UK website.
We can advise you on using your levy. Contact us for a free consultation by emailing [email protected] or telephoning 01905 743435.
The allowance reduces the amount of Apprenticeship Levy you have to pay by £15,000 across the year.
You cannot carry over any unused allowance into the next tax year.
If you start or stop being an employer part way through the tax year you can use your full annual Apprenticeship Levy allowance against the amount of the levy that you owe.
You pay Apprenticeship Levy every month as part of your PAYE bill. If you’ve overpaid Apprenticeship Levy during the year, you will receive a refund as a PAYE credit.
Apprenticeship Levy payments are a deductible expense for Corporation Tax.
Levy payers will pay it on their entire pay bill at a rate of 0.5%; however, they will have that amount offset against the £15,000 allowance (see above).
Yes, and this is 24 months. If not used within that period, the funds will be transferred to the overall amount available to the Government.
No. The scheme is applicable to all ages, whether new staff or existing staff (provided it is relevant to their existing or changed job role).
