Apprenticeship Funding

There are plenty of apprenticeship funding opportunities for employers, with most depending on whether you pay the Apprenticeship Levy or not.

The Apprenticeship Levy is a fee that businesses with an annual pay bill of over £3 million must pay, which equates to 0.5% of their total annual pay bill with a £15,000 allowance to offset against their Levi liability.

You must pay the Apprenticeship Levy even if you don’t train apprentices. levy-paying employers receive a 10% top-up of their levy from the government, through their digital accounts.

The funds in your digital account can only be used to train apprentices and carry out assessments with an approved training provider. Once the apprenticeship has begun, the training provider will be paid out of your digital account every month.

If you don’t pay the apprenticeship levy, you only need to pay 5% of the cost of training an apprentice; the UK Government will pay the other 95% (up to the funding band maximum).

If you are a non-levy paying employer with fewer than 50 employees, the government will pay for 100% of the training costs (up to the funding band maximum) for apprentices who are:

• 16 – 18 years old
• 19 – 24 years old who have been in care or have an education, health or care plan provided by their local authority

Additionally, employers receive incentive payments of £1,000 (paid in two instalments) for recruiting an apprentice that is:

• 16 – 18 years old
• 19 – 24 years old with a care plan

If you are a non-levy paying employer with fewer than 50 employees, you still get your 5% training costs waived in addition to receiving the £1,000 incentive.

Employers are also exempt from paying NI (National Insurance) contributions for all apprentices under 25; as long as their earnings are below the higher tax rate.