Home  /   Countdown to the Apprenticeship Levy May 2017

What is the Levy?

The Apprenticeship Levy comes into effect in May 2017.  It is being introduced by the Government to reach their target of having 3 million apprentices in employment by 2020 and to increase the number of skilled workers in the UK.


What is the aim of the Levy?

The aim of the levy is to get businesses to take on more apprentices


Who does the Levy apply to?

The Apprenticeship levy will be paid by all companies which have a payroll bill of £3 million or more. HMRC will collect 0.5% of their wage bill from April 2017. There will be a £15,000 allowance which will offset the levy payment and the government will top up the levy by 10%.  Payment of the levy will be made in voucher form to the training provider.

PAYE Bill How much would a company pay?
PAYE bill of £3m  will pay nothing – £15,000 due is cancelled by the £15,000 allowance
PAYE bill of £5m will pay £10,000 – £25,000 minus the £15,000 allowance
PAYE bill of £10m will pay £35,000 – £50,000 minus the £15,000 allowance

Who can access the Levy?

The Apprenticeship levy is to be spent on Apprenticeship training and associated costs. It cannot be used to subsidise the Apprentice wage.


What happens if I don’t use the Levy?

If you don’t access your levy the Government reserves the right to transfer the funds to other employers after a period of 2 years


Does it affect public sector?

Yes, the levy applies to the public sector


What should I be doing?

The levy comes into force in May 2017. Until then employers can take on Apprentices using the current system


How will it work?

All companies will have a digital account which will allow them to pay for training either through the levy or through their employer contribution.  Employers will shop around for the best Apprenticeship providers and pay for the training with their digital vouchers

To find out more information, please click this link to the Gov.UK website