What is the Apprenticeship Levy?
The Apprenticeship Levy is a UK tax on employers which can be used to fund apprenticeship training. In the current tax year, it is payable by all employers with an annual pay bill of more than £3 million at a rate of 0.5% of their total pay bill.
What can the Apprenticeship Levy be used for?
Employers can spend apprenticeship levy funding on apprenticeship training under an apprenticeship standard. The funding can be spent only with an approved training provider or an approved assessment organisation
Employers cannot use the apprenticeship levy to fund other costs of apprenticeships or other training costs. Government guidance states that the levy cannot be spent on:
- statutory licences to practice
- travel and subsidiary costs
- managerial costs
- work placement programmes
- the cost of setting up an apprenticeship programme
Transfer of Levy
From 1 April 2019, the maximum amount that employers can transfer increases to 25% of their levy credit. The receiving employer must use the funds for training and assessment for apprenticeship standards (not frameworks). The transferring employer must agree to the individual apprenticeships to be funded.