What is the apprenticeship levy?

Cyber Security Apprenticeships by Bragd

The levy is designed to fund apprenticeship training for all employers, wherever they are in the UK.

Apprenticeship Levy 101

The levy is, in effect, an additional tax paid by all large employers with a pay bill of over £3 million. They pay 0.5% of their total UK-wide annual pay bill into what is known as a ‘digital account’ or a ‘levy pot’. Levy paying employers access the funds in their digital account or levy pot through the online apprenticeship service and can only use these funds to pay for approved apprenticeship training in England. The training providers that are allowed to deliver the apprenticeship must be on the apprenticeship provider and assessment register (APAR) and Bragd have been on the register for many years. 

Sometimes levy paying employers will use up all of the funds in their digital account. The good news is that when this happens, they can continue to fund apprenticeships, but only need to contribute 5% of the apprenticeship cost; the government will pay the remaining 95%.

The funds in the digital account are valid for 24 months from the date the levy bill was paid, and if these funds aren’t used by the employer, the employers technically lose this money. The good news there are a lot of things an employer to do to prevent this happening. 

For example, they can work with a company like Bragd who will give them help and advice on which apprenticeships are suitable not just for new recruits, but for their existing staff too, and so use the funds to upskill and retain key personnel. Other options include transferring up to 25% of their levy funds to other employers, so if a levy paying employer wants to support their supply chain or partners they work with’ they can do that quite easily and see a real return on their investment.

If the employer has staff based in the devolved regions of the UK, they pay their levy bill based on their UK wide payroll bill, but they cannot use their digital account funds to pay directly for Apprenticeship training in the devolved regions. 

If for example, an employer has 25% of their staff in Scotland and 75% of their staff in England, 75% of their levy bill will go into their digital account for use in England, but 25% (the Scottish percentage) will in effect be sent to Scotland to be used to fund amongst other things – Modern Apprenticeships. This gives another way employers can maximise their levy bill. By working with Bragd (who are one of a handful of UK wide apprenticeship providers) employers can maximise the different regional funding streams and so deliver apprenticeship in the devolved regions, normally with no additional financial costs.

Bragd specialise in helping UK wide employers understand and maximise the available funding streams, wherever they are in the UK. Not only are we on the APAR, we also have a contract with Skills Development Scotland (SDS) to deliver apprenticeship training in Scotland. To find out more about the levy, how it works and how you can maximise your levy pot, contact us on 020 4576 0290 or email pam@bragd.co.uk.

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