The way apprenticeships are funded in the UK changed in 2016 with the introduction of the Apprenticeship Levy.
What Is the Apprenticeship Levy?
In its most basic sense, the Apprenticeship Levy is a tax on all UK employers that support the funding of apprenticeships.
It applies to both private and public companies which pay more than £3 million in wages.
If a company pays over this threshold annually on wages, they must now pay 0.5% of their pay bill directly into a fund. The government then adds an extra 10% (in England) to the fund, which is used by employers across the UK to spend.
Who Will Benefit from the Apprenticeship Levy?
In short, everyone.
With more funding from high-turnover employers and the government, the changes to apprenticeships through the Levy mean that the government will now fund apprenticeships for all ages.
Funding was previously targeted specifically depending on different factors in the old system – with the new Levy system in place, the government offers opportunities to more people, including existing staff at an organisation looking to expand their skills further.
I’m a non-levy paying employer – how does this work for me?
You can still benefit from the Levy – in fact, that’s the main reason the levy exists.
If you were to take on an apprentice, 95% of the apprentice’s funding/training costs would be paid by the government up to the maximum funding band available. You will need to just pay the 5% balance for any apprentice who is 22 years old or older.
For employers who do not pay the levy, the government will now pay all the costs for training new apprentices who are aged between 16 and 21 years old
the government will also pay all the costs for employers who do not pay the levy and have fewer than 50 employees if at the start of their apprenticeship training the apprentice is aged between 22 and 24 years old AND has either an Education, Health and Care (EHC) plan provided by their local authority and/or has been in the care of their local authority.
Businesses that have under 50 employees won’t pay anything if they employ apprentices under the age of 19, and will receive a £1,000 payment with an additional £1,000 payment to the training provider.
Get In Touch
We'd love to have a chat with you about your business needs and apprenticeships.
To find out more information, please call the Workforce Development Team on 0191 518 5508, email apprenticeships@eastdurham.ac.uk or fill in the web form below!