Are you ready for the new Government Apprentice Levy?

In April 2017 the government will introduce a new business levy which has been created to help fund their pledge of increasing the number of apprentices in UK to three million by 2020. The levy will be applied to all industries in the UK, replacing all apprenticeship funding currently provided by the government for companies of all sizes.

Once introduced, not all businesses will be required to pay. All employers will receive an allowance of £15,000 to offset against payment of the levy. This effectively means that the levy will only be payable by companies which have a payroll in excess of £3 million per year.

All businesses which have an annual payroll of over £3 million a year will be required to pay a 0.5% apprenticeship levy on their earnings, minus the £15,000 threshold. So for example a company that earns £5m a year will be required to pay £10,000. The levy will be payable through Pay As You Earn (PAYE) and can be paid alongside income tax and National Insurance.

The main aim of the levy is to encourage companies to take on more apprentices so the government can meet its manifesto pledge from before the last election. New apprentices can come from outside your organisation, but you can also retrain current employees to take the next step on their career ladder, or to change direction.

Why should my company take advantage?

The changes to apprenticeships mean that any large companies which start paying the levy but do not take on any apprentices will miss out by not receiving any of the funding the tax generates. Giving a placement to an apprentice can deliver real returns to your bottom line leading to lower overall training and recruitment costs.

According to skills minister Nick Boles, “employers in England that pay the levy and are committed to training will be able to get out more than they pay in.”

Research has shown that 96% of employers report benefits to their business after taking on an apprentice. It’s also been discovered that 80% of companies who invest in apprentices report an increase in staff retention, while an impressive 92% of employers said that apprenticeships lead to a more motivated and satisfied workforce.

By training your own apprentice you can train them to your standards and the effort you put into their training programme can be personally very rewarding. Five years down the line an employee who started as an apprentice will have far more knowledge of the business compared with a recent graduate with no real world experience.

If you have decided that you would like to start taking on apprentices at your company before the levy is introduced next year, the first step is to check the apprenticeships framework for an apprenticeship in your industry which you can offer at a suitable level.

Next you need to register your interest in employing an apprentice with the National Apprenticeship Service, then find a training organisation such as Lifetime Training that offers apprenticeships for your industry. The final steps are to check you are eligible for the grants which are available to cover the cost of training, before finding and selecting the apprentice you want to take on.

However once the levy comes into force next April, companies will access funding for apprenticeships through a new digital apprenticeship service account. From here you will be able to pay for training and assessment of apprentices and find the right training providers for your industry.

If you’re a business owner who would like to know more about the apprenticeship levy or how you can take on an apprentice at your company, get in touch with Lifetime Training by emailing or call 0333 0143 669.


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