What will it cost?

The Apprenticeship Levy took effect in April 2017 and affects all employers with a payroll bill of more than £3,000,000 per year.  If you are in this category, your organisation is now paying a sum to HMRC each month equivalent to 0.5% of your payroll bill.  There is one softener, however, in that the Government will provide a rebate of £15,000 to all Levy payers.  The table below shows what the net Levy cost will be to employers of varying sizes. 

Annual payroll Annual Levy Net Levy cost
£3m £15,000 £0
£4m £20,000 £5,000
£5m £25,000 £10,000
£10m £50,000 £35,000
£20m £100,000 £85,000

The Levy is calculated monthly so it can go up and down month by month as your payroll bill fluctuates with staff changes each month.  You can even move in and out of being a Levy-paying employer if you are on that £3m threshold.

What happens to the money?

Well, the good news is that you don’t have to lose it!  You can use your Levy to pay for Apprenticeship training for your own organisation (I’ll say a bit more about this in a moment).  The money goes into an account that is your own account and it stays there for two years before the Government finally takes it away permanently.

And there is another small sweetener in that for every £1 you put in, the government will add 10p (the 10% top-up).  The table below takes the final column from the table above and shows what actually ends up in your ‘Levy Account’. 

Net Levy cost Levy Account balance
£0 £0
£5,000 £5,500
£10,000 £11,000
£35,000 £38,500
£85,000 £93,500

How to spend it?

Well, here’s the really good news.  There is absolutely no doubt that with a little planning, the vast majority of employers can use their Levy to provide Learning & Development and Talent Management services within their organisation that offer a substantial return on investment and add real, tangible value to the organisation.  Here are a few facts about apprenticeship you may not be aware of:

  • Apprenticeship funding can be used to provide training for staff of all ages, right up to retirement
  • It can also be used to provide training for existing staff as well as new recruits so staff right across the organisation can benefit and Apprenticeships provide a great vehicle for wider CPD
  • Higher Apprenticeships exist right up to Masters Degree level – they are no longer a substitute for those with low academic ability, they can be used to provide training for high performing staff too
  • Apprenticeship training programmes are available for almost any occupation you can imagine – there are thousands of options available

How can we help?

Boom Training has developed specific expertise to enable us to support Levy-paying employers to gain maximum value from their levy funds.  We can help you to:

  • Calculate what your levy cost will be
  • Set up your levy account on the GOV.UK Apprenticeship Service website
  • Identify areas of the organisation where there may opportunities to provide Apprenticeship training for existing staff
  • Identify areas where introduction of new talent might add value
  • Review Apprenticeship training programmes and match these with needs/opportunities within the organisation
  • Produce a plan for training delivery

We will also provide a free recruitment service for any new Apprentices you wish to recruit.  Our delivery model is entirely workplace-based so staff almost never have to leave the workplace to complete their training.

For more information and a no obligation discussion to answer any queries you may have, please fill out the form below or give us a call on 023 8068 2060

We welcome all feedback. This include positive feedback we can share god practice with colleagues and give them a boost. It also includes suggestions for improvement. We will always listen and we'll let you know how we're responding to your feedback. Thank you.