Information for employers

Levy paying employers

Employers in England who pay the levy and are committed to apprenticeship training will be able to get out more than they pay into the levy, through a 10% top-up of funds to their digital account to spend in England on apprenticeships.

If an employer spends all of their levy, they are able to access further funding for apprenticeships on the same co-investment basis as smaller companies, contributing 10% themselves and drawing down 90% from the government.   

Non-levy paying employers

For non-levied employers, up to 90% of apprenticeship training and assessment costs will be paid.

The government is also making some additional funding available to support apprentices, for example care leavers and young people who need additional learning support.

The levy will support all post-16 apprenticeships in England, and employers can use the funds to meet the individual needs of their business.

Levy paying employers

Use of levy funds will be directly controlled by employers, and accessed via a Digital Apprenticeships Service (DAS) account.

The amount of funding entering the digital account will correspond to the proportion of employees with an English home post code (this is an English based system, even though the tax is UK wide).

Funds will expire 24 months after they enter an employer’s digital account, unless spent on apprenticeship training. The account will work on a first in, first out basis to minimise the amount of expired funds.

Non-levy paying employers

Non levy paying employers are expected to move to the Digital Apprenticeship Service (DAS) at a later date. 

Until then, education and training organisations who provide apprenticeship programmes will work with employers and the Skills Funding Agency to ensure that payments from the government (90%) and the employer (10%) can be made using other systems.

The levy will apply to large employers with an annual paybill in excess of £3m and will be 0.5% of the paybill, with an allowance of £15,000.

Levy paying employers

Levy paying employers will have the responsibility to calculate, report and pay the levy to HMRC alongside their usual PAYE payments.

Example:
Levied employer of 250 employees, each with a gross salary of £20,000
Paybill: 250 x £20,000 = £5,000,000
Levy sum: 0.5% x £5,000,000 = £25,000
Allowance: £25,000 - £15,000 = £10,000 annual levy payment.

The first time eligible employers will have to declare their liability will be May 2017, for the levy due on their April payroll.

Non-levy paying employers

For those employers who do not pay the levy, or those who have spent all their levy, there is a co-investment model with the government funding 90% of the cost of training and assessment, and the employer paying the other 10%.