Are you aware of the Apprenticeship Levy and how it works? If not, you’re not alone! The Levy is a government tax aimed at funding apprenticeship training, but it’s specifics can be confusing. Fortunately, we’re here to help! In this blog we will breakdown the Levy, including what it is, who it applies to, and how it works. So, sit back, relax and let’s dive into the world of the Levy pot.

The best place to start is the definition. In short, the Apprenticeship Levy is a tax that applies to all UK employers with a wage bill over £3 million per year. The tax is set at 0.5% of the wage bill, which can be used to fund apprenticeship training for employees within the business.

If you’re not sure whether you’re paying the tax, you will be able check through your payroll records.

The Government manages all apprenticeship funding and the levy tax through a website called the Digital Apprenticeship Service (DAS), this is where employers can manage their apprenticeship training. This website allows employers to choose an approved training provider and select an apprenticeship standard that suits their business needs.

The Levy is used to fund the training costs so if you’re a non-levy paying employer, you’ll be required to pay 5% of the total apprenticeship training costs upfront, with the Government covering the remaining 95%. If you’re a levy-paying employer, you’ll be able to use the funds available in your Levy account to cover the training costs.

It’s important to note that the funds in your Levy account have an expiry date of 24 months, so it is crucial to use them before they expire. If you don’t use the funds, they’ll be lost and will contribute to the Government’s apprenticeship budget.

So, in conclusion, the Apprenticeship Levy is an essential initiative designed to support Apprenticeship training in the UK. Understanding, it’s nuances and how it works is important for employers, whether you’re a Levy-paying or non-Levy paying business.

By using the Digital Apprenticeship Service, employers can manage Apprenticeship training and take advantage of the funding available to them. With the right training provider, businesses can equip their employees with the skills and knowledge they need to thrive in their careers. So, whether you’re a small or large business, you should be considering the benefits of Apprenticeship training and how the Apprenticeship Levy can help your business grow!