This will affect employers in all sectors. The levy will only be paid on annual paybills in excess of £3 million, and so less than 2% of UK employers will pay it.
If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy from 6 April 2017.
The levy will be charged at a rate of 0.5% of an employer’s paybill. Each employer will receive an allowance of £15,000 to offset against their levy payment.
If you are a levy-paying employer, you can now create an account on the apprenticeship service to:
- receive levy funds for you to spend on apprenticeships
- manage your apprentices
- pay your training provider
- stop or pause payments to your training provider
What you can buy with funds in your apprenticeship service account
You can only use funds in your account to pay for apprenticeship training and assessment for apprentices that work at least 50% of the time in England, and only up to the funding band maximum for that apprenticeship.
If the costs of training and assessment go over the funding band maximum, you will need to pay the difference with other funds from your own budget.
You can’t use funds in your account to pay for other costs associated with your apprentices (such as wages, statutory licences to practise, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme).
Changes for employers who don’t pay the levy
Support with apprenticeship costs
Non-levy paying employers will share the cost of training and assessing their apprentices with government – this is called ‘co-investment’.
From May 2017, you will pay 10% towards to the cost of apprenticeship training and government will pay the rest (90%), up to the funding band maximum.