At Kingdom College, we collaborate with employers to create and deliver tailored training programs that meet their unique needs.
Whether you’re aiming to recruit new apprentices or enhance your internal training initiatives, contact us to explore how we can support your goals.
Table of Contents
- What Is the Apprenticeship Levy?
- How to Use the Apprenticeship Levy Funds
- Eligible Uses for the Apprenticeship Levy
- Benefits of Hiring Apprentices
- Accessing and Managing Your Levy Account
- Spending Beyond Your Levy Pot
- Incentives for Employers
- Funding Options for Non-Levy Payers
- Conclusion
1. What Is the Apprenticeship Levy?
The apprenticeship levy is a mandatory contribution for employers with an annual pay bill exceeding £3 million. This 0.5% tax is collected monthly via PAYE, with a £15,000 allowance to reduce the total payment. The government further boosts your contributions by 10%, turning every £1 into £1.10 in your digital apprenticeship service account.
2. How to Use the Apprenticeship Levy Funds
Funds are accessible through the Apprenticeship Service (AS), a platform where you can manage training payments, track top-ups, and oversee apprenticeships. Employers must spend their levy funds within 24 months, or they will expire. Groups of companies can pool funds into a single account, and up to 25% of funds can be transferred to other businesses or training agencies.
3. Eligible Uses for the Apprenticeship Levy
Levy funds can be used exclusively for training and end-point assessments for apprentices who spend at least 50% of their time working in England. The funding covers program-specific costs but excludes wages or other expenses. Any training costs exceeding the maximum funding band must be covered by the employer.
4. Benefits of Hiring Apprentices
Hiring apprentices provides a tailored approach to developing talent and addressing skill gaps. Key benefits include:
- Strengthened talent management strategies
- Enhanced employee development and qualifications
- Increased productivity
- Eagerness and motivation from apprentices to learn
5. Accessing and Managing Your Levy Account
The Apprenticeship Service (AS) is your hub for managing levy funds, training providers, and apprenticeships. To create an account, you’ll need either a government gateway login or your accounts office reference number. Signing an agreement with the Education and Skills Funding Agency (ESFA) is essential to access the funds.
Once set up, you can:
- Add team members to manage the account
- Post apprenticeship vacancies
- Monitor financial transactions and training commitments
6. Spending Beyond Your Levy Pot
When your levy funds are exhausted, you can benefit from co-investment. The government funds 95% of the training and assessment costs, with employers covering the remaining 5%. This enables employers to continue developing talent even after their levy account is depleted.
7. Incentives for Employers
Employers hiring apprentices aged 16-18, or those aged 19-24 who were in care or have an Education, Health, and Care Plan, are eligible for a £1,000 payment. This support is disbursed in two installments—at months three and twelve of the apprenticeship.
8. Funding Options for Non-Levy Payers
Non-levy-paying employers—those with a pay bill under £3 million—can access apprenticeships through co-investment. They contribute just 5% of training and assessment costs, while the government funds the remaining 95%. Small businesses with fewer than 50 employees may receive full funding for apprentices aged 16-18 or those meeting specific criteria.
9. Conclusion
The apprenticeship levy provides a valuable opportunity for employers to enhance their workforce through tailored training programs. By leveraging levy funds, businesses can close skills gaps, boost productivity, and build a pipeline of qualified talent. Whether you’re a levy payer or a smaller employer, apprenticeships offer scalable solutions to meet your organization’s training and development goals.
Ready to make the most of your apprenticeship levy? Get started today!
