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An apprenticeship levy payer is classed as any UK employer with a PAYE bill in excess of £3m.

A 0.5% deduction will be taken from PAYE over this £3m marker. This 0.5% becomes the employers levy fund, which they can use to upskill their existing staff with apprenticeship qualifications or introduce new apprentices to their organisation.

Levy payers can access and manage their levy through GOV.UK's apprenticeship service, an online tool where employers can undertake a number of activities:

  • See their levy fund like a bank balance.
  • Manage the staff who can operate their apprenticeship service account on their behalf.
  • Select apprenticeship qualifications relevant for the business and employee.
  • Select the training provider who can deliver the apprenticeship on their behalf.
  • Authorise payments to their chosen provider.
  • Manage their apprentices and see what qualifications they are undertaking.

Employers can also use GOV.UK's apprenticeship service to recruit apprentices and see the longer term financial allocations earmarked for apprenticeship training.

It is worth noting that levy paying employers only have a 24 month period to use their levy fund (on a rolling basis). The levy is taken through PAYE on a monthly basis. The online apprenticeships service gives an indication about how much money can still be used and in what timeframe.

All apprenticeship standards are allocated a fee banding between £1,500 and £27,000. Most higher and degree apprenticeships fall within the highest band. The £27,000 is broken down and taken in monthly payments over the term of the apprenticeship. Over four years, this works out at £562.50 per month. This is paid directly from your levy account to the training provider.

Employers should be wary of training providers who offer their apprenticeship standards at much lower costs. Employers should also ensure that the training provider is attaching a relevant and transferrable qualification to the apprenticeships (such as an HND, HNC or BA Hons). This will ensure your staff are getting recognised qualifications, and that you are receiving good value for money.

If employers need any help using their apprenticeship service account, the apprenticeship team at Solent are happy to assist.

The latest apprenticeship changes have put employers firmly in the driver's seat, but spending the levy appropriately may be a concern for some. We can also offer advice around available apprenticeship provision; training needs analysis; and staff development strategy.

Get in touch

The team here at Solent are happy to talk through your current situation and look at how we can work together to address your training needs.

Get in touch with us via email at ask@solent.ac.uk, or call 023 8201 5066.

Useful links

Levy calculator

Levy information on GOV.UK

Browse list of apprenticeship standards

GOV.UK's guide to apprenticeship funding

Solent's step-by-step guide to the apprenticeship service (PDF)

GOV.UK's apprenticeship homepage

The Skills Funding Agency's guide to higher and degree apprenticeships

National Apprenticeship Service's guide employers

You can also call the National Apprenticeship Service on 08000 150 600 or email them at nationalhelpdesk@findapprenticeship.service.gov.uk.

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