Apprenticeships have been reformed and the Government want to make sure that the quality and quantity of Apprenticeships in the UK continues to improve. In April 2017 the Apprenticeship Levy was introduced. All employers with an annual wage bill over £3 million are now generating their own apprenticeship training fund to support the development of their existing employees and new apprentices.

Apprenticeship Levy 

What you need to know

Employers who pay the apprenticeship levy have a simple choice to make –

use apprenticeship levy funds to pay for approved apprenticeship training, or watch available funds disappear when they expire in line with set time limits.

Put simply, employers can use it or lose it!

Employer deductions, which are made automatically via PAYE systems and transferred directly into an online digital apprenticeship service (DAS) account, are subject to an additional top-up payment each month from Government.  However, many employers are not making the most of their apprenticeship levy funds or the additional incentives available for a number of key reasons:

  • They are confused about the new rules
  • They are unsure about the impact
  • They are confused about the funding and limitations
  • They are putting off setting up a DAS account
  • They are viewing the levy as an additional business tax

So what can you do to recoup your levy spend?  Carpe Diem!

The funding will support social and economic growth aims of the Apprenticeship Vision in England, whilst building a strong, credible and long-term training programmes for both individuals and industry.

Paying the Apprenticeship Levy

You will become a Levy-paying Employer if:

  • You have a total wage bill of £3 million each year
  • You are connected to other companies or charities for Employment Allowance which in total have an annual wage bill of more than £3 million

How much do you pay?

If you’re an employer who is not connected to another company or charity, you will have an Apprenticeship Levy allowance of £15,000 each year. This means the Levy you pay will be reduced by £15,000 across the year (You won’t be able to carry over any used allowed into the next tax year).

If you start or stop being an employer during the tax year, you can use your full annual Apprenticeship Levy allowance against the amount of the Levy that you owe.

English Apprenticeships: 2020 Vision

Nobody understands the skills employers need better than the employers themselves. That is why we are placing them in the driving seat. They are designing apprenticeships so that they focus on exactly the skills, knowledge and behaviours that are required of the workforce of the future. A levy will put employers at the heart of paying for and choosing apprenticeship training, and place the funding of apprenticeships on a sustainable footing.

Calculate what you owe

Apprenticeship Levy is charged at 0.5% of your annual pay bill.

You can use HMRC’s Basic PAYE Tools to help you work out how much you need to pay.

For the first month of the tax year:

  1. Divide your Apprenticeship Levy allowance by 12.
  2. Subtract this figure from 0.5% of your monthly pay bill.

For each of the following months:

  1. Calculate your total pay bill for the year to date.
  2. Add up your monthly levy allowances for the year to date.
  3. Subtract your levy allowance for the year to date from 0.5% of your total pay bill for the year to date.
  4. Subtract the amount of the levy you’ve paid in the year to date.

New to Work-Based Learning? Don’t worry, here’s a helping hand…

Standards – The New Apprenticeship…

The Government has created a five-year plan to realise the full potential of English citizens. Their goal is for Apprenticeships to be considered as a high-quality and prestigious path to successful careers in all sectors of the economy. To do this, they have put the employers in the driving seat to design Apprenticeships that focus on the exact skills, knowledge and behaviours that are required of the workforce of the future.

What exactly does this mean?

Apprenticeship programmes have formerly been referred to as ‘Apprenticeship Frameworks’. To modify Apprenticeships, the Government has worked in collaboration and approved over 1000 employers to develop new ‘Apprentice Standards’ for their individual sectors.

There have been 250+ Standards published so far and many more in development.


Towards the end of the Apprenticeship, the employer is required to acknowledge that the learner is ready for the End-Point Assessment – this is known as the Gateway. Using the Gateway to sign-off the Apprentice indicates that the employer and provider both believe that the apprentice has acquired the relevant skills, knowledge and behaviour to achieve their qualification.   

The Gateway could use a variety of methods and will be specified in the Assessment Plan of the individual Standard.

End-Point Assessment

This is one of the biggest changes in the reform of Apprenticeships and is designed to improve quality.

Previously in Frameworks, the Apprentice was continuously assessed to receive their qualification. Now, once the Apprentice has progressed through the Gateway, they will be assessed by an independent organisation who will make sure that they are fully competent and productive in their chosen occupation.

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