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Apprenticeship Levy

Whether you are a small or large employer an Apprenticeship gives you the opportunity to develop the skilled staff you need. Business Development at Antrec can help you source and train Apprentices.

We offer Apprenticeships at various levels including:

  • Intermediate – Level 2
  • Advanced – Level 3
  • Higher – Level 4 and above

In the following sectors:

  • Customer Service
  • Management
  • Team Leading
  • Business Admin

If you are interested in hiring an apprentice or applying for an apprenticeship please contact Antrec on 0333 023 7450 or email

Guide to the Apprenticeship Levy

From April 2017 the Government is changing the way it funds Apprenticeships. The Apprenticeship Levy is an additional payroll tax for employers, set at 0.5% of their annual pay bill and collected through PAYE.

Who does it affect

The levy will affect all employers in the UK with an annual pay bill of more than £3 million.

How will the apprenticeship levy work?

Contact out Levy Expert who will come out and support you to understand how the levy impacts your company.

The levy is set at 0.5% of an employers gross annual pay bill. They will have an allowance of £15,000. So an employer with an annual pay bill of £5,000,000 will need to spend £10,000 on the levy:

Levy sum: 0.5% x £5,000,000 = £25,000

Subtracting levy allowance: £25,000 – £15,000 = £10,000 annual levy payment

  • You will calculate, report and pay your levy to HMRC, through the Pay as You Earn (PAYE) process alongside tax and National Insurance Contributions (NICs).
  • If you have calculated that you will pay the apprenticeship levy, you will need to declare this and include it in your usual PAYE payment to HMRC by the 19th (or 22nd if you report electronically) of the following month.
  • The levy allowance accumulates on a monthly basis over the year and unused allowances will carried forward from one month to the next.
  • The levy amount is collected by HMRC and then made available via a digital account, through which they will be able to pay for training for apprentices.
  • Any apprenticeship levy payment to HMRC will be allowable for Corporation Tax.

WARNING – Levy payments will expire 24 months after they are entered into your account. So if you don’t use it…you will lose it!!

The Government have provided an online tool that enables you to estimate your levy contribution &  plan your training requirements.

Estimate my apprenticeship funding:

Does the government provide any additional funding to Levy payers?

The Government will apply a monthly 10% top up to your levy account for spending on apprenticeship training in England.  What this means is that for every £1 of the levy payers contribution that enters the digital account for spending on approved apprenticeship training in England, they will actually get £1.10 paid in (£1 + 10p). Again, funds will expire 24 months after they enter the apprenticeship digital account unless they are spent on an apprenticeship. Top-up payments do not come out of an employer’s levy allowance, and are in addition to it.

Recruiting 16-18 year old apprentices grant incentive – All employers (including those paying levy) who take on a 16-18 year old will receive an additional payment of £1,000 payable in two equal instalments at 3 and 12 months initially via the training provider but in time directly from government. This applies regardless of whether it is a framework or standard. 16-18 incentive grant payments do not come out of an employer’s levy allowance, and are in addition to it.

Extra Support

Apprentices aged 19 to 24 who have previously been in care or who have a Local Authority Education, Health and Care plan may need extra support and to assist in this, employers who train an apprentice who is aged 19 to 24 and has previously been in care or who has a Local Authority Education, Health and Care plan, will receive £1,000 to help with these additional costs in the same way as the payment for 16 to 18 year olds.

Furthermore, there is additional funding for smaller employers to take on those who need more support. Employers with fewer than 50 people working for them will be able to train at no cost those aged 19 to 24 and have previously been in care or who have a Local Authority Education, Health and Care plan. These employers will not be required to contribute the 10% co-investment; instead the government will pay 100% of the training costs for these individuals.

For recruiting 16-18 year olds, and for recruiting 19-24 year old care leavers / those on Education, Health and Care (EHC) plan:

  • £1,000 to the employer and £1,000 to the Training Provider Plus
  • £600 if Apprentice lives in 10-20% most deprived areas
  • £300 if Apprentice lives in 20-27% most deprived areas
  • £471 for extra Maths/English training
  • Up to £150 per month for learning difficulties (dyslexia) or disabilities
  • Employers with fewer than 50 people working for them – government will pay 100% of the training costs those aged 19 to 24 and have previously been in care or who have a Local Authority Education, Health and Care plan.

These incentive payments do not come out of an employer’s levy allowance, and are a transaction directly between Government and the employer and provider.

What can you spend the levy on

Funds in your digital account, can only be used towards the costs of apprenticeship training and spent with an approved training provider.

They cannot be used to pay for other costs associated with your apprentices or wider training effort e.g. pay, travel and subsidiary costs or the costs of setting up an apprenticeship programme.

What happens if you don’t have enough funds in your digital account to pay for the all of the training you want?

some employers paying the levy may find that the funds in their digital account aren’t enough to cover the full cost of training the number of apprentices they want to employ. Therefore government have confirmed that they are happy to pay 90% towards the extra cost of such additional apprentice training if required by an employer.

How are the training and assessment costs calculated?

Every apprenticeship standard and framework is placed in a funding band, which sets the maximum amount of funding that can be used towards training costs over the duration of an approved apprenticeship. The same funding bands will apply to all employers paying for apprenticeships:

  • Intermediate Level Apprenticeships (Level 2)
  • Advanced Level Apprenticeships (Level 3)
  • Higher Apprenticeships (Levels 4 and above)
  • Degree Apprenticeships (Levels 6 and 7)

Funding bands are set after recommendations from industry

For existing Apprenticeship Frameworks in England (existing and available for delivery), and Apprenticeships Standards (those that are available for delivery and those in development), see the following links:

What about the funding of apprentices taken on before the 1 May 2017 Levy date?

The levy will not affect the way employers fund training for apprentices who started an apprenticeship programme before 1st May 2017.

What about employers who do not have to pay the levy?

From 1st May 2017, they can choose the apprenticeship framework or standard they require, and the training provider to deliver it. A price is then agreed with that provider within the funding bands. As described, the government will make a contribution of 90% to the cost of this training, plus any incentives.

If you do not pay the levy, the Government has indicated that you won’t need to use the digital apprenticeship service until at least 2018.

The ESFA have also published information for employers on the key things they need to consider when using the apprenticeship service.

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