A short guide to the apprenticeship levy

6 April, 2017

That’s right, today is the day that the apprenticeship levy is introduced and many companies STILL don’t understand what it’s all about. In fact, City & Guilds revealed a major lack of awareness among businesses just weeks before the introduction of the apprenticeship levy.

Don’t worry though; we’re here to explain in clear terms what the levy is and who it applies to.

What is the apprenticeship levy?

The Apprenticeship Levy is a levy on UK employers to fund new apprenticeships. In England, control of apprenticeship funding will be put in the hands of employers through the Digital Apprenticeship Service.

Does the levy apply to you?

The levy applies to employers in England in all sectors, who have an annual pay bill above £3m. The pay bill is defined as employee earnings subject to Class 1 secondary NICs.

How is the levy calculated?

The levy is 0.5 per cent of the annual pay bill. All employers will receive a £15,000 annual allowance, to be offset against the bill. This effectively means that employers with an annual pay bill of £3m or less pay no levy.

How do you pay the levy?

Employers will calculate, report and pay their levy to HMRC, through the Pay as You Earn process alongside tax and National Insurance Contributions. It can then be accessed by employers through an online digital service account.

What are the benefits of the levy?

The apprenticeship levy hopes to:

  • Put employers in the driving seat
  • Increase the quality of apprenticeships
  • Simplify the system
  • Give employers purchasing power

For full guidance on the apprenticeship levy click here

Go back to blog listings >

  • ““Incredibly organized and easy to communicate with, would highly recommend to other companies looking for an apprentice.” ”

    Lisa John Director
  • ““Integrity FT made our search for an apprenticeship easy, and they found us someone who has now become a valuable member of our team.” ”

    Sam Newton HR
  • “"Integrity FT are not only a great team to work with, but our relationship with them is strategically important as we continue to develop the next generation of talent at Formed Creative". ”

    Oliver Rebbeck Director