The Apprenticeship Levy was introduced as part of the Government's plan to change Apprenticeship funding in April 2017, and to increase the quantity and quality of Apprenticeships.  The Levy is a compulsory tax which aims to fund 3 million new Apprenticeships in England by 2020.

To access Apprenticeship training for existing staff or new Apprentices you recruit you will either pay via the Apprenticeship Levy or pay a 5% contribution.

Do I Pay the apprenticeship levy or pay 5% apprenticeship contribution?

  1. Pay the apprenticeship levy

If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy. Read guidance on how to pay the apprenticeship levy.

You will report and pay your levy to HMRC through the PAYE process.

The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.

  1. Employers who don’t pay the levy

If your pay bill is under £3m each year, you are a ‘Non-levy paying employer’ but still share the cost of training and assessing your apprentices with the government - this support with apprenticeship costs is called ‘co-investment’.

The co-investment rate has changed for new apprenticeships starting on or after 1 April 2019. You will now pay 5% towards the cost of apprenticeship training. The government will pay the rest (95%) up to the funding band maximum.

All apprenticeships that started before 1 April 2019 will continue at the previous co-investment rate of 10%.

If you do not pay the levy, you won’t be able to use the apprenticeship service to pay for apprenticeship training and assessment until at least mid-2019, unless you are receiving a transfer of funds from a levy paying employer.

Instead, you’ll need to agree a payment schedule with the provider and pay them directly for the training. The provider must prove that you have paid your contributions as a condition of government paying its contribution.

Types of Apprenticeships

There are 2 different types of apprenticeships to choose from:

  • apprenticeship standards - each standard covers a specific occupation and sets out the core skills, knowledge and behaviours an apprentice will need;
  • apprenticeship frameworks - a series of work-related vocational and professional qualifications, with workplace- and classroom-based training

What can Levy Payers buy with funds in the apprenticeship service account?

You can only use funds in your account to pay for apprenticeship training and assessment for apprentices that work at least 50% of the time in England, and only up to the funding band maximum for that apprenticeship.

If the costs of training and assessment go over the funding band maximum, you will need to pay the difference with other funds from your own budget.

You can’t use funds in your account to pay for other costs associated with your apprentices (such as wages, statutory licences to practise, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme).

Read the apprenticeship funding rules for full details of what you can and can’t pay for with funds from your apprenticeship service account.


How to take on an Apprentice can be found here 

Contact the Marketing team for more details on 01706 631 417 or email