Apprenticeship levy—use of the funds by employers
Apprenticeship levy—use of the funds by employers

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

  • Apprenticeship levy—use of the funds by employers
  • Amount of the funds
  • Use of the funds

An apprenticeship levy on employers in the UK, first announced in the Summer Budget 2015, came into force on 6 April 2017, set at a rate of 0.5% of an employer’s pay bill. All such employers have to pay the levy even if they do not actually have apprentices. However, each employer receives an allowance of £15,000 to offset against its levy payment. This means that in practice the levy will only be paid by larger employers whose pay bill is in excess of £3m. The levy is collected through the PAYE system alongside tax and National Insurance Contributions. For more information, see Practice Note: Apprenticeship levy.

Apprenticeships are a devolved policy and so the authorities in each part of the UK are responsible for their own apprenticeship programmes, including how funding is spent on apprenticeship training. This Practice Note relates to employers with employees in England.

Levy-paying employers with employees in England are given access to a new Digital Apprenticeship Service (DAS) account, which they can use to access funding for apprenticeships which started on or after 1 May 2017. The amount of funds available in an employer’s DAS account is determined by the value of its apprenticeship levy and the number of its employees living in England. In effect the levy shifts the cost of funding apprenticeships from the government