The apprenticeship levy: what it means for levy payers

Paul Hudson, Chief Operating Officer at Lifetime Training, discusses the effects of the levy on
large employers.

Although the apprenticeship reforms offer large employers everything they have been lobbying government for in recent years – truly standardised, employer-led, quality skills training – a levy, at the end of the day, is a levy. It’s understandable that this funding change will have an impact, particularly at board level, but it’s time to embrace this change and accept that, in the long run, it will be for the greater good of our businesses, and more so for the UK economy. More engaged, well-trained, motivated team members mean better productivity levels, increased customer satisfaction and above all a boost to your bottom line. Levy aside, what’s not to like about that?

Large employers will pay a 0.5% tax on their pay bill (above £3 million). A number of incentives have been put in place to support the transition to standards and to achieve buy-in. These include an annual £15,000 allowance to offset the levy fee, £1000 per 16 to 18-year-old apprentice (and 19-24 year olds with a Local Authority education, health and care plan), cash incentives for training apprentices in the top 27% of deprived areas, and a 10% monthly top up to levy funds.

Large employers will have the opportunity to choose their SFA approved training provider, which Lifetime Training is. They will then negotiate training costs based on the government guidelines that have been set regarding the funding band maximum for each apprenticeship programme. When it comes to choosing your training provider remember that the most important element is ensuring your apprenticeships programme delivers as part of your people strategy. That way you will be able to demonstrate that it delivers a return and meets business goals.

If you have a levy query, email our dedicated apprenticeship levy team on

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