Apprenticeship Levy
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Overview
The Government Apprenticeship Levy requires all UK employers with an annual pay bill of more than £3 million to pay 0.5% of their wage bill to the Government’s Apprenticeship Service. In England, this is used to pay for apprenticeship course fees.
The Levy is collected by HMRC and is only designed to cover training fees. Levy funds which are unspent expire after 24 months and the money is returned to the Treasury, resulting in a missed opportunity for employers to choose how these funds are used.
This is not the same as the CITB Levy, which is raised through CITB Levy-registered employers in the construction industry only and is used for many varied purposes, see business plan breakdown.
Apprenticeship Levy-paying employers can:
- Use their funds to support apprentices in their own business.
- Use the Apprenticeship Levy Transfer and/or the Apprenticeship Levy Pledge to share up to 25% of their annual unspent funds with other businesses.
- Use one of the routes or a combination of Transfer and Pledge at the same time, as long as it doesn’t equate to more than 25% of their annual total Levy funds.
The Apprenticeship Levy Transfer
If you are an Apprenticeship Levy-paying employer, you can use the Apprenticeship Levy Transfer to transfer unspent funds to other employers in your supply chain. You can choose a specific employer or business that you want your unused funds to go to. This could support apprenticeships in other construction businesses you already have a relationship with.
The Apprenticeship Levy Pledge
If you are an Apprenticeship Levy-paying employer, you can use the Apprenticeship Levy Pledge service to make your unspent funds available for other employers to apply for. Pledges give you more choice about where your money can go – you can set the criteria including location, sector, type of job role and apprenticeship qualification level. Businesses that meet your criteria can then apply for the funds.
Why Transfer or Pledge?
Any unspent levy funds are returned to the Treasury after 24 months. These two options give Apprenticeship Levy-paying employers a say in how their unused levy is spent, as by transferring and pledging funds, businesses can support the sectors and communities they choose to.
Sharing unspent funds with smaller businesses can help support new apprenticeship starts across the construction industry. This can ensure more people get the jobs they want; help businesses to expand; address known critical skills shortages and gaps; and allow investment in existing employees – apprenticeships are not just for new employees; they are available to upskill existing employees too.
More information
For more details on transferring or pledging your unspent Apprenticeship Levy funds to benefit others in the construction industry, visit the Government guidance page.
Non-Apprenticeship Levy-paying employers
Non-Apprenticeship Levy-paying employers can’t access Apprenticeship Levy funds directly. However, they can still access financial support to help with apprenticeship training and assessment costs by:
- Using the Apprenticeship Levy Transfer to access funds from an Apprenticeship Levy-paying employer they have an existing relationship with.
- Using the Apprenticeship Levy Pledge service to apply for available unspent funds pledged by Apprenticeship Levy-paying employers.
- Accessing apprenticeship funding directly from the Government.
How to apply for funds
The Apprenticeship Service simplifies the way funding for new apprenticeship starts can be accessed.
To apply for and receive a transfer or pledged funds, businesses must create an Apprenticeship Service account.
An Apprenticeship Service account is also the way to access apprenticeship funding from the Government