If you are an employer who have already taken the leap to enrol an employee onto an Apprenticeship, you may be aware that depending on your status, you will either be a levy paying, or non-levy paying business. Here, we will discuss what the Apprenticeship levy is, how it works, and how the funding is used.
So, what is “the levy”?
The levy is essentially a pot used for businesses to submit their funds into. Each levy business will have an Apprenticeship service account that can be accessed to spend on Apprenticeship training.
How does the levy work?
Businesses contribute 0.5% of their annual payroll into a dedicated levy pot. When an apprentice is enrolled, the cost of their training is drawn directly from this fund. The levy pot is refreshed each year in line with the organisation’s payroll, ensuring ongoing access to Apprenticeship funding.
How do I know my business levy status?
Your business will have a Levy pot if the annual payroll is above £3million or are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million.
Annual pay bill
The annual pay consists of employees that are subject to employer Class 1 secondary national insurance contributions. The Government have guidance for employers to work out how much you need to pay.
Does all the funding raised get spent?
All the Levy allowance must be used by the end of each tax year. If you can’t spend your levy pot, you can transfer up to 50% of it to other businesses.
I don’t know how much is in my levy pot, what do I do?
You can check your Apprenticeship Levy pot through the UK government’s Apprenticeship Service.
Here’s how to do it step-by-step:
Sign in to your Apprenticeship Service account
Go to the Apprenticeship Service Account and sign in with your Government Gateway ID (this is usually linked to your PAYE scheme).
Check your balance
Once logged in, you’ll see your levy funds available and a breakdown of transactions.
You can view:
- Current balance
- Expiry dates for funds (unused levy funds expire after 24 months)
- Top-ups and payments in/out
If you don’t have access
Ask your payroll or finance team. They may already have access and can share the information. If your organisation hasn’t set up an account yet, you’ll need to register it using your PAYE reference number and accounts office reference number from HMRC.
For smaller employers (not paying the levy)
You may still have funds if the government is co-funding your apprenticeship training. The Apprenticeship Service will still show your available co-investment.
Ready to use your Levy pot?
So, now you have an understanding as to what a levy is, email us at [email protected] and upskill your team with one of our several Apprenticeships. We offer programmes for: Marketing; Leadership & Management; Professional Services; Health & Social Care; Learning & Development.
Or, call 01329 825805, our Apprenticeship experts are available Monday-Friday 8am-4pm.
Your Levy pot: Use it or Lose it!
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