Browse commonly asked questions regarding apprenticeships, training courses and our smart classroom environment. If you can't find the answer to your question, please feel free to get in touch with our team and we will be more than happy to help.
Last updated: 22nd March 2019
Do you have less than 50 employees and a salary bill of less than £3 million?
Do you have more than 50 employees and a salary bill of less than £3 million?
Do you have a salary bill of more than £3 million?
There is an allowance of £15,000 that reduces the amount of levy that companies have to pay over a year. This means that the levy only applies to anything over £3 Million from your pay bill. The levy is a monthly deduction, so in reality, these costs will be taken in any month where your pay bill is over £250,000.
Earnings in scope for the levy include any remuneration or profit coming from employment of all staff (including directors), such as wages, bonuses, commissions, and pension contributions.
The amount of funding you receive in your account to spend on apprenticeships will depend on how many of your employees live in England and the proportion of your pay bill paid to these employees.
The levy is a devolved policy, so if you have operations based in Scotland, Wales or Northern Ireland, the funding that you contribute for these employees will be worked out by the apprenticeship authorities in these areas. You will not be able to access these funds in your apprenticeship service account.
Employers who pay the levy and are committed to apprenticeship training will get more out than they pay in to the levy and will be entitled to a 10% government top-up to monthly funds.
Example – employer of 250 employees (all based in England) with an annual salary bill of £5,000,000:
£15,000 allowance means that levy entry point = £3,000,000
Therefore, Levy is payable on £2,000,000 of salary bill
0.5% of £2,000,000 = £10,000 annual levy payment
+ 10% Government Top-Up of £1000
Total annual levy funds available to spend = £11,000
You can use this tool to estimate your own levy funding.
Funds can only be used for:
To access the funds that you have paid into the apprenticeship levy, as well as the 10% top up provided by the government, you will need to have an apprenticeship service account.
The apprenticeship service is an online digital system (similar to online banking) that has been set up to support the apprenticeship levy. The online service will allow you to financially manage your apprenticeship programmes and help you to estimate your financial spend.
You can see funds appear in your digital account monthly, a few working days after you have confirmed your salary bill and levy contribution to HRMC for the previous month. You can then use the account to set up apprenticeships and authorise payments to training providers.
If you run out of levy funds, the remaining training costs for that month will come out of the ‘co-investment’ model. This means that any remaining costs that can’t be covered by what is in your apprenticeship service account will be paid for 95% by the government, and you will need to cover the remaining 5%.
Levy funds expire 24 months after they enter your account unless you spend them on apprenticeship training. Levy spend will be applied on a first in, first out basis and applies to any government top-ups in your digital account.
For example, if you started paying into the levy in April 2017, and you haven’t spent any of the funds, they will start to expire on a rolling monthly basis starting from April 2019.
It is now possible to transfer up to 25% of your annual levy funds to another employer in your supply chain. Levy funds expire 24 months after entering the digital account, so the introduction of the funding transfers will ensure that more businesses can benefit from the levy funding. Funds transferred to another employer can only be used for apprenticeship standards, not apprenticeship frameworks.