Since April 2017 a new funding model has been in place for apprenticeships. How an apprenticeship is funded is now based on the employer.
Employers fall into two main groups:
- Those with an annual payroll over £3 million
- Those with an annual payroll under £3 million
| Payroll over £3m – Levy Paying Employer | Payroll under £3m – Co-Investor Employer |
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0.5% of payroll is paid by way of a tax to HMRC, with a £15,000 allowance |
Payroll is not high enough to pay the levy |
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The government will top up an employer’s account by 10% each month |
The government will fund the cost of the apprenticeship at the following levels:
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These payments are taken monthly |
The training provider you select to deliver your apprenticeship training will draw down funding directly from Government and will invoice the employer for the 10%, if applicable |
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Payments are held in an online Apprenticeship Service Account |
For employers with payroll’s that border £3m, they will start paying the Levy if at any point payroll reaches or exceeds £3m. |
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Monies in this account can be used by the employer to purchase apprenticeship training by selecting an employer through the Apprenticeship Service and authorising payment |
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Monies that remain unused in this account after a 24 month period will be taken back by HMRC for distribution to fund apprenticeships for non-levy/ co-investing employers |
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Employer can transfer up to 10% of their Levy funding to another employer, through the Apprenticeship Service Account, should they wish to |
Find out how to register and use the apprenticeship service as an employer
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If you have any queries, please don't hesitate to contact us.
