Apprenticeship levy
Apprenticeship levy

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Apprenticeship levy
  • Why was the apprenticeship levy introduced?
  • Who is required to pay the levy?
  • How is the amount of the levy calculated and paid?
  • Reporting and returns
  • Compliance and penalties
  • Appeals
  • Anti-avoidance
  • Practical implications of the apprenticeship levy
  • Success of the levy

This Practice Note sets out the details of the apprenticeship levy, which is payable by certain employers from 6 April 2017. The levy is charged at a rate of 0.5% of an employer’s annual pay bill. A £15,000 annual allowance for employers means that the levy is only paid by employers whose annual pay bills exceed £3m.

The apprenticeship levy is administered by HMRC as part of the real time information (RTI) system. Employers pay the levy via the PAYE system.

Why was the apprenticeship levy introduced?

The apprenticeship levy, which was introduced by Finance Act 2016 (FA 2016) and originally announced at Summer Budget 2015, is intended to 'significantly increase the quantity and quality of apprenticeships in England' by creating an apprenticeships fund that each employer can then access to meet its individual needs.

Employers who pay the levy can access funding for apprenticeships through a digital account. This fund has been operational since 1 May 2017 as part of the apprenticeship program that was also effective from that date. If an employer isn't required to pay the levy, they won't need to use the apprenticeship service to pay for apprenticeship training and assessment until ‘at least 2018’.

The details of accessing the fund and utilising the digital account are outside the scope of this Practice Note. More information can be