The apprenticeship levy

What is the apprenticeship levy?

All employers with an annual wage bill greater than £3 million will be expected to pay a 0.5% tax on payroll.

The Government hope the changes will help to bridge the skills gap by encouraging more businesses to invest in future talent and help it fulfil its pledge to create 3 million more apprenticeships in the UK by 2020.

The levy will replace all taxpayer funding for apprenticeships for companies of all sizes.


What are the changes?

Changes to the way apprenticeships are funded came into force on 6th April 2017 in the form of a new apprenticeship levy, which will be applied to all employers with an annual wage bill greater than £3 million.

Warrington & Vale Royal College are committed to helping all employers (levy &non-levy payers) to understand the levy and the apprenticeship reforms which are taking place. We will help all employers to make the transition to the new arrangements.

Any employers who are unsure about what they have to do, or who would like more information about existing apprenticeship schemes please get in touch with us at the earliest opportunity. We are able to provide a full service management of levy budgets and apprenticeships.


What about SMEs that do not have to pay the levy?

Employers who do not have to pay the apprenticeship levy will not need to use the digital voucher to pay for apprenticeship training and assessment until at least 2018. However, they will be asked to contribute 10% of funding toward the cost of their apprenticeship training.

The employer will make an initial payment to the training provider and the government will then pay the difference. They will pay up to 90% towards the cost of training and assessment, and employers will pay the remaining 10%.


What can levy funds pay for?

Funds can pay for apprenticeship training and assessment.  They cannot pay for apprentices’ wages, travel or subsidiary costs, managerial costs, work placements, traineeships or the costs of setting up an apprenticeship programme.


How will the apprenticeship levy be collected?

The levy will be collected every month through the PAYE system alongside income tax and national insurance contributions. The first time eligible employers will have to declare their liability to HMRC was May 2017 for levy due on their April payroll.

Levy-paying employers will be able to see corresponding funds in a dedicated digital account shortly after their final declaration to HMRC (after May 22).


What will employers get back?

Employers in England will be able to reclaim their levy contributions as digital vouchers to pay for training apprentices. The voucher system will not apply in Scotland, Wales or Northern Ireland.

Unspent funds in an employer’s digital account will expire after 24 months.

Employers that pay the levy will receive a 10% top-up from the government to their total monthly contributions in England. Employers can access their funds through an online account.


Will there be any extra financial support?

  • £1000 payment for employers that take on a 16-18 year old– paid at 3 and 12 months into the apprenticeship.
  • Small employers (those with fewer than 50 employees) will be exempt from paying the 10% co-investment if they employ  an apprentice aged  16-18.
  • £1,000 to an employer for the additional support required to take on an apprentice aged 19-24 who has previously been in care or who has a Local Authority Education, Health Care Plan.


Please call 01925 494348 or email us at for more information.

How employers can access their funds

Employers can access their funds through an online account. Please click here for more information.


Useful links