Costs and Funding

Apprenticeship Levy.

If your business falls under the scope of the apprenticeship levy, you have the opportunity to utilise the funds for training expenses. This levy has been established to empower and motivate employers to invest in and establish apprenticeships by putting apprenticeship funding in their hands. It is worth noting that the levy applies to all employers, regardless of their sector, operating in the United Kingdom. The levy rate is fixed at 0.5 per cent of an employer’s pay bill, which is collected on a monthly basis through the Pay As You Earn (PAYE) system.

Non-Levy Government Funding.

The Government has implemented a scheme whereby non-levy paying employers can receive financial support for their training expenses. Under this scheme, the Government will cover 95% (or even 100% in certain instances) of the balance required to fund the training. However, it is worth noting that a small proportion of employers may still be obligated to contribute the remaining 5% towards the training costs.

If your business falls under the category of a non-levy paying employer, you may be eligible to receive complete funding of 100% for your training needs, provided that your annual wage bill is below £3 million, and you have a workforce comprising less than 50 employees. In such cases, the Government will generously cover the entire cost of training for any Apprentices aged 16-18. For Apprentices aged 19 and above, the Government will contribute 95% of the training expenses, while the remaining 5% will be the employer’s responsibility.

To summarise, for Apprentices aged 16-18, your business can receive full funding of 100% regardless of your non-levy status. For Apprentices aged 19 and above, the Government will cover 95% of the training costs if you are a non-levy paying employer. However, you will need to contribute the remaining 5% of the funding for any apprentices above the age of 19.

Apprenticeship Levy Transfer.

Employers who pay the apprenticeship levy and have unused apprenticeship funds can find employers who want to receive a transfer in a number of ways.

  • Work with employers in your industry
  • Get in touch with other employers in your industry.
  • Get in touch with an Apprenticeship Training Agency (ATA)
  • Work with regional partners.

Employers who contribute to the apprenticeship levy and possess untapped apprenticeship funds can explore various avenues to locate employers interested in receiving a transfer. From April 2019, levy-paying employers can transfer a maximum amount of 25 per cent of their annual funds. Transferred funds will be used to pay for the training and assessment cost of the apprenticeships agreed with the receiving employer. The sending employer and the receiving employer need to first agree on the details of the transfer of funds, for example, which apprenticeship standard, how many apprentices, and the cost. Once both employers are registered on the apprenticeship service the following must be done in their accounts to complete the transfer.

Confirm the transfer: Find the full details at Gov.UK/guidance