The apprenticeship levy is a tax on UK employers to fund new apprenticeships.
The levy was introduced in 2017 to encourage organisations to invest in training apprentices to help fill the UK skills gap.
Apprenticeship levy criteria
If you're an employer with an annual salary bill over £3 million, you’ll need to pay the apprenticeship levy. The government will add 10% to the amount you pay each month.
Find out more about paying the levy
If your UK salary bill is less than £3 million, you won't need to pay the apprenticeship levy.
Spending your apprenticeship levy funding
If you pay the levy, you’ll receive funds through the apprenticeship service to spend on your apprentices’ training and assessment.
When you employ younger apprentices, you’ll receive an additional payment of £1,000, made in two equal instalments via the training provider. To be eligible for this, your apprentice must be:
- 16-18 years old
- 19-24 years old and have previously been in care, or have an Education, Health and Care plan provided by their local authority
Could I transfer any of my spending?
You can transfer up to 25% of your annual apprenticeship funds to another organisation, for them to spend on training for the apprenticeship standards.
You might choose to work with your supply chain, other employers in your industry, or regional partners.
What happens to leftover funds?
Your funds remain available for 24 months from the date of payment. After this time, any unused funds are reclaimed by the government.
Can I employ an apprentice if I don’t pay the levy?
You can still offer apprenticeships in your organisation - you’ll need to contribute 5% of the cost of training and assessment, and the government will fund the rest directly to the training provider.