The apprenticeship Levy is a tax that applies to all businesses and has been designed to encourage employers to maximise the benefits of apprenticeship training.  The Levy applies to all businesses operating in the UK with an annual wage bill over £3m. These organisations have to make an investment of 0.5% of this wage bill, paid monthly through Pay As You Earn (PAYE) to HMRC.

This monthly calculation must also include any remuneration or profit coming from employment, such as wages, bonuses, commissions, and pension contributions that the employer pays National Insurance contributions on. Firms then receive a Levy allowance of £15,000 per year, from the Government, to offset against the Levy they must pay. However, any firm with a footprint that includes operations in the devolved nations must subtract this as a percentage of their total apprenticeship pot. Each month they will then receive a further 10% top up from the Government. Once an employer has paid their monthly Levy bill, they will be able to access these funds to pay for Apprenticeship training, in the form of digital vouchers, through a new Digital Apprenticeship Service account.

Apprenticeship Levy funds can be used to bring new talent to the business or to upskill existing employees and help reduce the skills gap within the UK economy.

Calculate your levy contribution

Calculate your levy bill

Enter the values to the left of this form for your total wage bill and the amount of your workforce in Wales or Scotland and we’ll calculate your levy contributions.

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How to spend your apprenticeship Levy account?

A Levy allowance is calculated on a monthly basis and will accumulate throughout the year with any unused allowance being carried over from one month to the next. Employers in England will be able to reclaim their levy contributions either as an employer provider, or through a registered training provider such as Remit Group. Apprenticeships have now all been allocated a funding band. There are 15 funding bands, ranging from £1,500 to £27,000, regardless of age or geographic location which provides a more simplistic fee for employers to negotiate when working with providers.  By knowing the value of the qualifications you want delivering, as a rough guide, you can calculate how many of the relevant apprenticeships can be delivered using your Levy allocation. The vouchers will last for 24 months from the time they appear in your digital account. If they are not spent within this time, they will expire.

What happens if your pay bill is less than £3m?

There are certain employers who will be required to contribute towards the cost of their apprenticeship training outside of the Levy system, such as those whose pay bill is less than £3m per tax year. If your business fits the criteria, you will be required to contribute 5% of the total cost of your apprenticeship training through a co-investment payment- the Government will pay the remaining 95%.

Recruiting 16-18 year olds

If you recruit a 16-18yr old apprentice, you can receive a £1000 incentive from your training provider. This payment is made in two equal sums (£500) at month 3 and month 12 of the qualification.

Good advice

If you are looking to develop your apprenticeship and Levy strategy, Remit offers a free consultancy session with one of our apprenticeship Levy experts. They will go through the background to the Levy, provide estimates on your liability and advise on potential apprenticeship pathways from across our portfolio of qualifications.

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If you are looking for your dream job, we are here to help. Call us today on 0115 975 9550 and speak to a specialist

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