A comprehensive guide to the apprenticeship levy and how to maximise levy funding for apprenticeship programmes.  

What is the Apprenticeship Levy?

The Apprenticeship Levy is a compulsory ‘tax’ aims to fund the development and delivery of three million new apprenticeships by 2020.

The levy is a UK-wide initiative. This means all employers in the UK with an annual wage bill of more than £3 million will have to pay into it, regardless of where their workforce is situated.

Levy employers must pay must pay 0.5% of their payroll into a central levy ‘pot’, which can then be used to fund apprenticeships. Employers have an allowance of £15,000 per year to offset against their levy payment. The levy is paid monthly on a rolling basis to HMRC and will be collected through the PAYE system alongside income tax and National Insurance.  

Note, if your organisation is part of a group you might find that you’re still liable to pay the levy even if your individual organisation’s pay bill is under £3 million. Find out more about paying the apprenticeship levy and how to report payments

How does the apprenticeship levy differ in Scotland from the rest of the UK?

Apprenticeships are a devolved policy so in Scotland, they are designed and managed by the Scottish Government with funding administered by Skills Development Scotland through contracted training providers and direct employer contracts.

Scotland’s approach to apprenticeship levy policy is different to the other UK nations and gives employers more options and flexibility to invest in training that’s right for their business. 

While Scotland’s share of the annual levy pot – estimated at £230 million – is calculated and assigned by central government, funds are then distributed to employers by the Scottish Government to spend on a wide range of vocational training. This includes expanding the apprenticeship programme, and increasing the number of graduate level and foundation apprenticeships.

Funding for non-levy employers

Employers who do not pay the levy can still seek funding for Apprenticeships in the usual way. 

The Scottish Government via Skills Development Scotland contributes to the costs of training for apprentices aged 16-24, (and 25+ for some frameworks):

Blue tick bullet For apprentices aged 16-19 years – apprenticeship training costs are fully funded.

Blue tick bullet For apprentices aged 20-24 years – a proportion of the training costs will be covered with employers meeting the rest.

Further support

GP Strategies Apprenticeships offers a levy management service for everything you need to effectively manage your apprenticeship levy.

If you are a levy paying employer and need advice and support, please contact our specialist team on 01786 478 478. You don’t have to wait until you pay the levy! 




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