Fees, funding and entry requirements
Key dates and information
For levy-paying employers
• All employers operating in England with an annual pay bill of over £3 million will pay a 0.5% apprenticeship levy to HMRC.
• Thursday 6 April 2017 marks the start of the apprenticeship levy.
• Levy-paying employers will pay their contributions monthly to HMRC via the PAYE process, starting in May 2017.
• The only way to recoup your levy is to recruit apprentices.
• Employers receive a £15,000 annual allowance to offset against their levy payment.
• In May 2017, apprenticeship funds become available through the Apprenticeship Service.
• Digital account funds can only be spent on training, not on apprentice wages or travel costs.
• Any unused annual allowance cannot be carried over to the next tax year, and funds will expire after 24 months.
• Further government co-investment opportunities are available should online funds be insufficient.
• The government will withhold 20% of the total price for training and assessment, including end-point assessment, until the apprentice completes the programme.
Please visit https://www.gov.uk/guidance/pay-apprenticeship-levy for information about how to calculate, report and pay what you owe, as well as for information about how to allocate your allowance between connected companies.
Further government co-investment opportunities
Should you find that there are insufficient funds in your online account to cover the cost of the apprenticeship training, then you will be entitled to co-investment. This means that the government will pay 90% of costs up to the funding band maximum, with you paying the remaining 10%.
For non-levy paying businesses
• Employers who do not pay the apprenticeship levy will pay just 10% of the cost of training their apprentices, with the government paying the remaining 90%.
• The training provider will invoice the employer directly.
• If the cost of the apprenticeship is higher than the upper limit of the funding band, the employer will have to cover the additional cost.
For employers with 49 or fewer employees
The government will fund all of the apprenticeship training costs, up to the maximum value of the funding band for the apprenticeship. This is only the case if, on the first day of the apprenticeship, the apprentice is:
• aged between 16 and 18 years old
• aged between 19 and 24 years old and either has an education, health or care plan provided by the local authority,or has been in the care of the local authority.
For both levy-paying and non-levy-paying businesses
All apprenticeships which begin from Monday 1 May 2017 will correspond to new funding bands. Apprenticeship standards will be allocated to one of the fifteen new bands. These upper limits represent the maximum amount the government will contribute, or that employers can take out of their levy fund, for the delivery of the training and assessment for an individual apprenticeship. Further information about the funding bands can be found here.
If the cost of the apprenticeship is higher than the funding band limit you, as an employer, will need to cover the difference.