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The Apprenticeship Levy


The Apprenticeship Levy is part of three changes in law aimed at increasing the number of Apprentices as part of the Government’s commitment to have three million. Apprentices by the end of this Parliament. In addition to the Apprenticeship Levy the Government is also:

  • Implementing, as part of the Enterprise bill, a requirement on all Public Sector Organisations to have 2.3% of their total staffing headcount as Apprentices.
  • Implementing the abolition of National Insurance employer contributions for Apprentices aged under 25 from April 2016.

The Apprenticeship Levy aims to fund three million Apprentices in the UK by 2020. Any organisation with a payroll in excess of £3 million per year will be subject to a 0.5% levy on all staff costs over the £3m. The amount paid (monthly) will be transferred to a digital account controlled by the said employer. This fund can only be used for Apprenticeship training.

The digital account

You are able to register and create an account via the digital apprenticeship service.

A few working days after the payment is confirmed the funds will appear in the digital account. Therefore you are able to use your levy funds to pay for apprentice training and assessments.

All organisations will receive a £15,000 offset allowance, as well as a monthly top up of 10% from the SFA (Skills Funding Agency) as the levy funds appear in the account. If the levy fund does not cover the full cost of the apprenticeship training, the government can provide the extra financial support.

The levy fund (including top ups) will expire after 18 months. Any unused funds will be carried on from one month to the next.

The account works on an automatic first-in, first-out basis. This ensures that previous funds (inc. top ups) are used first to minimise expired funds.