The Apprenticeship Levy: Employer guide

Last updated 14 Februrary 2017

UK businesses have until 6 April 2017 to prepare for the introduction of the Apprenticeship Levy. The levy is part of the government’s initiative to encourage employers to invest in apprenticeships through funds they have more control over.

To talk to us about hiring IT apprentices on our accelerated programmes, call us on 0800 081 6022 or complete our contact form and we’ll get back to you fast.

What is the Apprenticeship Levy?

The Apprenticeship Levy is a government initiative changing the way apprenticeships are funded in the UK. There are three things employers need to know:

  1. Employers with a UK wage bill of over £3 million will pay a monthly levy bill.
  2. The levy payments will be 0.5% of their annual UK wage bill.
  3. Employers will see and control their levy payments in a digital account, where they can spend their funds on apprenticeship training.

How will Firebrand help me prepare for the Apprenticeship Levy?

Click here to talk to an Apprenticeship Levy consultant now.

My company isn’t in the IT industry. Can I still invest my digital funds in IT apprenticeships?

Yes. Our current IT apprentice employers range from international swimwear brands and law firms to secondary schools and charities.

If you’re not sure whether your company is suitable to be an IT apprentice employer, call us on 0800 081 6022 and we’ll let you know.

How do I pay the levy?

You’ll pay your levy to HMRC through PAYE (together with tax and National Insurance). The payments will then appear in your digital account, where you can select and pay for an apprenticeship with an approved training provider like Firebrand.

Funds that have been in your account for longer than 24 months will expire, so it’s important you invest them into apprenticeships or the levy will simply act as a tax.

Will the government contribute anything towards the cost of apprenticeship training?

The government contributes in two ways:

  1. The government pays in an extra 10% of the funds you invest for spending on apprenticeship training into your digital account.
  2. If you don’t have enough funds in your account to pay for training in full, you’ll only have to pay 10% of the remaining balance. The government pays the other 90%.

How does my company benefit from the Apprenticeship Levy?

The levy puts employers in control of their apprenticeship funding, letting you decide where and how you spend the funding available. It’s not a tax, so you’ll receive levy payments back by reinvesting them into apprenticeship training.

The levy benefits employers that are committed to training and developing their workforce more than those who don’t, as they’ll be able to claim back more from the government than they contribute.

Will my company still receive funding if it doesn’t have to pay the Apprenticeship Levy?

Yes. All non-levied employers will receive government funding for Digital Apprenticeship Standard programmes (developed by employer Trailblazer groups) by co-investment from the government.

You’ll only pay 10% of the cost of training and the government pays the rest (90%).

Confused? Click here to talk to us about how the levy can benefit your team.