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Apprenticeship Levy

The Apprenticeship Levy is not just for the young and for new starters, it can be used to develop the skills and capabilities of existing employees.

What is it?
The Apprenticeship Levy is a form of taxation designed to help companies offer more apprenticeships. It was initially introduced to benefit businesses by boosting essential training and development apprenticeship programmes.

When did it start?
The Apprenticeship Levy started from 6th April 2017. After that, any employer subject to the payroll threshold of more than £3m would start paying a monthly levy from then.

Who can use it?
If your wage bill is over £3m, you pay 0.5% into a digital account. Depending on what you haven’t already spent, you may have built up a considerable fund that you can invest. Small and medium size businesses still access Apprenticeship Levy support through the EFSA fund and “co-investment” – the fund pays 95% of the costs.

The apprenticeship levy can only be used within England, as apprenticeship legislation differs across the devolved nations. For this reason, apprentices funded by the levy must work at least 50% of their time within England. The amount of levy you can access is directly linked to the proportion of your employees living in England.

Unlevied employers can use the levy through a transfer of funds from a levy-paying employer. Employers can transfer up to 25% of their annual levy fund to another business, for example, a company in its supply chain. This can be a great way to develop business relationships or give something back to the community.

How can I use it?
The levy funds sit in a digital ‘apprenticeship service’ account used by employers to fund apprenticeship training provision. The account is used to manage levy funding, track apprentices, find training providers, or transfer unused funds.

Any levy funds are topped up each month with a 10% government contribution. As levy funds expire after 24 months, it is vital to utilise your levy as soon as possible.

Once a programme and training provider has been selected and a price agreed, your provider will be paid out of your digital account every month. Apprenticeship levy rules state that your levy must only be used to pay for apprenticeship training and End-point Assessment, and cannot be used to pay apprentice wages.

To find out more about the Apprenticeship Levy, click here.

To register your interest in Apprenticeships at LI Europe, click here.


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