If you’re an organisation with a payroll of over £3 million, you will have been paying 0.5% of your annual payroll into your Levy pot since its introduction on 6 April 2017.
The payments are made monthly to HMRC through the PAYE process and are held in a Digital Apprenticeship Services Account (DAS) on your behalf.
If you don’t spend the money in your pot within 24 months after it enters your digital account it goes into a wider pot which the UK Government will redistribute.
Businesses can use funds in their digital account to pay for:
- apprenticeship training programmes
- (end point) assessment for apprentices within their business
Alternatively, organisations can transfer up to 25% of their Levy funds to support apprenticeship training in other organisations.
If you do pay the Apprenticeship Levy you must use The Digital Apprenticeship Service (DAS) account to:
- manage your levy pot and make payments
- manage your apprentices
If your organisation’s payroll is less than £3m annually, you will not pay the 0.5% levy.
However, non-levy paying businesses and organisations can get a 95% contribution towards the cost of the apprenticeship programme from the UK Government, with the remaining 5% to be funded by the business/organisation.
Further, should your apprentice be aged between 16 and 18, and you have less than 50 staff, the government may pay 100% of the fees, there are a couple of requirements to be satisfied.
There are grants available of £1000 for some organisations in certain areas that can also be used towards the cost of the apprenticeship training programme.
The apprenticeship must be under 18 to qualify, or if the apprentice is over 18 and in Education, heath and social care sector, or if the apprentice has a Local Authority Care Plan in place you may be eligible to apply for the additional grant to help fund the 5% if you are a non-levy payer.
Levy paying employers can transfer up to 25% of their Levy funds to other employers to help them with their apprenticeship training programmes.
You can set stipulations on subject areas and levels e.g. you could help smaller suppliers in your supply chain to fund their people development programmes – knowing that the benefits of their improvement will ultimately benefit you.
If you are an organisation seeking additional funding to support your apprenticeship training programmes, you can find out more here:
Search funding opportunities (manage-apprenticeships.service.gov.uk)