• Apprenticeships


Apprenticeships are a great way to recruit fresh talent, train your workforce and address future skills gaps. All employers with a gross annual wage bill (or payroll) of over £3 million will be required to pay an apprenticeship levy. Employers with an annual wage bill of £3 million or less will not pay this levy, but will need to pay a 10% contribution to the cost of the apprenticeship training they require and the government will fund the remaining 90%.

Here is a useful summary of the changes and how they may affect you:

What is the size of your business?

Over £3 million annual payroll

Levy paying employer

You will be required to pay the apprenticeship levy. This means you will pay 0.5% of your payroll bill above £3 million

Less than £3 million annual payroll and more than 50 employees

Non-levied employer

You pay 10% of the cost of apprenticeship training. The remaining 90% is funded by the government (up to the upper funding band limit).

Less than £3 million annual payroll and less than 50 employees

Non-levied employer

You pay 10% of the cost of training for apprentices aged over 19. There is no charge for apprentices aged 16-18 (and those aged 19-24 who are care leavers or have an education, health and care plan).

What is the apprenticeship levy?

In a bid to deliver three million apprenticeship starts by 2020, the government introduced an apprenticeship levy (a form of tax) on employers with an annual wage bill of more than £3 million, which can only be used for apprenticeship training. The levy puts you the employer in control of apprenticeship funding, allowing you to invest in new recruits or upskill current staff.

Who will pay the levy?

Employers with a wage bill of more than £3 million per year will pay a levy of 0.5% of their payroll. This levy applies to employers in all industries, private and public sectors.

How will the government collect the levy?

The levy will be collected through the employer’s Pay As You Earn (PAYE) scheme paid to the HMRC. Employers can then access these funds to pay for apprenticeship training through the online apprenticeship service.

How much will you have to pay?

The levy will be 0.5% of your gross annual wage bill (England only). Every employer will have a £15,000 allowance, which is the £3 million threshold before the levy is applied. This allowance and the amount of levy payable is easiest explained with an example:

Example One: An employer with an annual paybill of £2,000,000
Levy sum: 0.5% x £2,000,000 = £10,000 = No levy to pay (the total amount of the levy sum is less than the £15,000 allowance)
Example Two: An employer with a paybill of £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000 (Minus levy allowance of £15,000) = £10,000 levy to pay annually

How will employers reclaim the levy funds?

Employers will be able to access the funds they have paid via the levy to fund apprenticeship training for their business. This will be managed via a new online apprenticeship service and every levy paying employer will need to register an account on this site. The government will also apply a 10% monthly top-up to a levy paying employer’s account (ie. for every £1 you put in via the levy the government puts in 10p).

What can the levy funds be used for?

An employer can only use their levy funds to pay for apprenticeship training from an approved training provider. You are free to choose your provider (e.g. Windsor Forest Colleges Group) from those on the Register of Providers. Once you have chosen a provider and the apprenticeship training you want to purchase, the funds will be taken from your online account each month to pay the training provider and the assessment organisation. The funds cannot be used for other costs such as an apprentice’s wages, travel or management.

Can the levy be used to train existing staff or just new recruits?

Yes, your levy funds can be used to develop an existing employee through an approved apprenticeship programme as well as a newly recruited apprentice, as long as the individual meets the eligibility criteria.

What if the cost of apprenticeship training exceeds the funds in my levy account?

If the cost of your apprenticeship training exceeds the monthly amount in your online levy account, then you will simply need to pay 10% of the remaining training costs and in return the government will fund the other 90%.

How much does apprenticeship training cost and what are funding bands?

All apprenticeships will be assigned to one of 15 funding bands, which each have an upper funding limit (from £1,500 to £27,000). For example, the Accounting Intermediate Apprenticeship (Level 2) has a band limit of £2,000.

What should I do next if I am a levy paying employer?

You will need to contact HMRC and create your account on the online apprenticeship service portal. The Windsor Forest Colleges Group can provide you with advice and support with this process and, if you do not currently employ apprentices, we can help you set up an apprenticeship scheme.

What if my wage bill is under £3 million?

If your annual payroll bill is less than £3 million you will not have to pay the apprenticeship levy, but you will be required to pay 10% of the cost of the apprenticeship training you require. The government will then fund the remaining 90%. If you are an employer with fewer than 50 employees, the government will fund 100% of the cost of apprenticeship training for those aged 16-18 (and 19-24 year olds who are leaving care or have an Education, Health & Care Plan). You will only pay the 10% contribution for apprentices aged over 19.

Are there any financial incentives to hire a 16-18 year old apprentice?

To support employers with the cost of supporting a 16-18 year old apprentice (and 19-24 apprentices who have left care or have an Education, Health & Care Plan), the government is currently offering a £1,000 incentive.

Who can provide the training?

The levy funds can only be spent on apprenticeship training with approved training providers. You are free to choose your provider, the apprenticeship training you require and negotiate costs.

What can The Windsor Forest Colleges Group do for your business?

We can help you prepare for and understand how the apprenticeship funding changes and the levy will affect your business. With over 40 years of experience in delivering apprenticeships to SMEs and multinationals, we can help you develop a successful apprenticeship scheme that will meet your business needs, drive your company forward, increase productivity and help you get back more than you put in.

Through our dedicated Business Services team, we support the employer as well as their apprentice to help both parties maximise the benefits of an apprenticeship.

We offer:

  • advice and support with setting up your online levy account
  • help accessing funding
  • industry-experienced trainers
  • a free apprentice matching service
  • training tailored to meet your needs
  • state-of-the-art facilities
  • a dedicated account manager
  • sector-specific expertise
  • a free consultation
  • high quality training – Ofsted has graded our apprenticeship provision as good

For a free consultation, call 01753 443855 or email This email address is being protected from spambots. You need JavaScript enabled to view it.

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