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Employers’ newsletter - Apprenticeship Levy/costs

The apprenticeship levy applies as from 6 April 2017 at a rate of 0.5% of payroll cost, offset by a £15,000 ‘levy allowance’. This means that, in effect, it applies only to employers with an annual payroll cost of £3 million or more. 

Employers can access the levy to finance their qualifying apprenticeships. To access the levy, employers are required to accept an agreement with the Skills Funding Agency. Once the agreement is accepted, employers can use the funding in their account to pay for training offered by one of the apprenticeship training providers certified by the government.  It can be used towards training any eligible learner, whether a school leaver or an existing employee. It can be used to pay for accredited apprenticeship training schemes as well as the costs of any assessments or certification. It cannot be used to cover the wages paid to apprentices.

Small business that do not actually pay the apprenticeship levy can also access the fund though they have to contribute 10% of the costs. In last year’s Budget the Chancellor announced that this was to be reduced to 5% of the costs. This change was published  in the 2018 Autumn Budget and in the recent Spring Statement it was announced that the change comes into force from 1 April 2019.

If you require further advice or assistance, please do get in touch.



Date: 27th March, 2019
Author: David Hadley


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