Quick Guide To The Apprenticeship Levy

Quick Guide To The Apprenticeship Levy

What is the levy?

From April 2017, employers with a payroll of over £3m will have to pay a levy of 0.5% of their payroll minus an allowance of £15,000 to offset against their bill. From May 2017, levy payers will be able to access the amount they’ve paid plus a 10% top up from government, via the online Digital Apprenticeship Service and spend this on apprenticeship training and assessment for their business.

Here’s how much will be paid by two example businesses:

Business A has a payroll is £3 million. 0.5% of their payroll is £15k but as they also get a ‘levy allowance’ of £15k, this cancels this out so they won’t need to pay anything!

Business B has a payroll is £4 million. 0.5% of their payroll is 20k, however with the allowance of £15k, they’ll only be required to pay the remaining £5k. This will be broken down over the year to be paid monthly, so £417 a month and from May 2017 they’ll be able to access this amount, plus a 10% top up from government via the Digital Apprenticeship Service to spend on apprenticeships training and assessment.

What size of businesses will be paying the levy?

The levy is calculated by payroll bill as opposed to number of employees. Here is the breakdown of the anticipated levy payers by size of business based on government figures of businesses with a payroll of £3m+ to date.
As you can see, most levy payers are in the 250+ employees bracket.


Would you like to know more about changes to apprenticeships in 2017? Register for our free webinar in January.

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