The Apprenticeship Levy Explained

Improve performance, progress careers




The Apprenticeship Levy has proven to be extremely beneficial to businesses and organisations across England, with over 750,000 people currently on a development programme. It is a tool to drive investment in skills development and training, help close skill gaps, support employee attraction and encourage employee engagement.

The Apprenticeship Levy is a government led scheme, launched in 2017, designed to increase the number of apprenticeship programmes throughout the UK. It is tax paid by employers (those with a payroll over £3million per annum) which is then held in an account that can only be used to fund apprenticeship training costs.

So how does the Apprenticeship Levy work?

  • No matter the sector / industry, all employers with a payroll of over £3 million per annum, (approx. 2% of UK business), are require to pay the Apprenticeship Levy.
  • These businesses are required to pay 0.5% of their payroll into the fund.
  • Once a business has started to pay towards the levy, it will gain access to the Digital Apprenticeship Service account (DAS); an online portal where funds can be used for the delivery of apprenticeship programmes, with your chosen training provider.
  • SMEs and large organisations alike, can take advantage of the levy by working with training providers, like BMS Progress, to create sustainable apprenticeship programmes.
  • Non-levy paying businesses benefit from a co-investment model. They will need to contribute 5% towards the cost of the apprenticeship programme, the government will fund the remaining 95%.

BMS Progress provide world-class training and apprenticeships. We've helped many well-known B2B organisations in the UK ensure everyone is able to take control of their continuous professional development. Whether you're a levy paying employer or a small business exploring your options, we will work with you to understand the Apprenticeship Levy funding and how we can maximise your return on investment.

Who can use the Apprenticeship Levy?

The Apprenticeship Levy can only be used with in England, this is because the apprenticeship legislation differs across nations. This means that levy funded apprenticeships must work at least 50% of their time within in England. The amount of levy you can access is linked to the proportion of time your employee lives in England.

Can the Apprenticeship Levy be used to train existing staff?

It is a common misconception that apprenticeships are only available for school leavers or manual industries, but this is not true!

Apprenticeships in the UK are awarded at Levels 1 (GCSE equivalent) through to Level 8 (Masters equivalent), meaning that apprenticeships can act as a clear roadmap for personal development and career progression.

Apprenticeships are a fantastic tool to help close skill gaps within your team, as well as increasing retention rate and productivity.

Apprenticeship Levy Funding Rules

There are a few thing you need to bare in min when using the Apprenticeship Levy to make sure you are compliant. The being said, as your apprenticeship provider, BMS Progress will ensure you are following all rules throughout the length of your learner's programme:

  • Apprenticeship Levy funds can only be spend on apprenticeship programmes or the End-point Assessment.
  • Levy funds cannot be spent on wages or non-apprenticeship training.
  • Your levy funds will expire after 24 months after the date submitted, at which point they will default back to the government if not accessed. This is to incentivise regular investment in high-quality apprenticeship training.

At BMS Progress, we appreciate that the Apprenticeship Levy can be a little complex to navigate, and so we will work closely with you at every step to understand your business needs, exploring funding rules, identify relevant programmes, and ultimately help you to maximise your levy funds.

Have more questions? Get in touch with one of our experts today.

Training makes for thriving teams

Looking to tackle a business challenge? Develop and evolve employees? Enhance performance across the board? Find out more about our sales training and manager coaching courses.

Grow Your Own Talent With Apprenticeships

Want to take advantage of the Apprenticeship Levy, or simply foster the next generation of talent? You’ll need to ensure that the curriculum is tailored to your needs and aligned with your values.

How can BMS Progress help you?

Want to find out more? Whether it’s about a specific programme,  apprenticeship standard or just about us and how we work, our team is always on hand to help. Simply get in touch using the button below and we will endeavour to answer your questions.