Apprenticeship Levy

UK businesses with an annualised wage bill of more than £3 million have until April 2017 to ensure that they are prepared for the introduction of the Apprenticeship Levy.  The countdown is now on;

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Our guide is aimed at helping you to understand the key facts of the Levy and how they can impact onto your business in addition to providing some information on how UK Levy can support your business.

We believe that the Apprenticeship Levy should not be looked at as a stealth tax but more of an opportunity for employers to create a culture of development and succession.


Impact on your business

How does the Levy impact on to your business?

The Apprenticeship Levy is going to cost businesses above the £3m wage bill threshold 0.5% of their wage costs with a levy allowance of £15,000 per annum.

One key factor in the Apprenticeship Levy is that the costs to businesses are not one off, they are ongoing every year for your business.

There is not only the cost of the Levy you have to consider.  To ensure that the Levy works effectively there are other direct and indirect costs to consider such as cost of managing the process, managing compliance in accordance with all the requirements of not only the Skills Funding Agency but also for Ofsted and Awarding Organisations or Independent Assessment Body, employees training, employees training attendance, employee wages.

For businesses who have not had to be overly concerned with this before will prove to be a considerable shift change in relation to managing their business.  If they fail to embrace the introduction of the Levy there is no doubt that it will have a direct affect.

At this time, there is vague hope that the government will not go through with the Apprenticeship, however given the fact that there are identified gaps in the government finances together with their pledge to reach 3 million apprenticeship starts by 2020 will mean that they will have very little option but to continue to move forward with the Levy.

If your business receives or wants to bid for public service contracts of over £10 million failure to embrace the Apprenticeship Levy and engage apprentices will almost certainly rule your business immediately out of receiving these contracts.

Additional key facts

  • Levy will be based on total employees earnings subject to Class 1 secondary NICs
  • The 0.5% levy is based on your full UK payroll bill, not just the amount over £3m
  • The levy will be payable through PAYE and will be payable alongside income tax and National Insurance.
  • Payment will be taken monthly, in real time, meaning as your wage bill changes each month the levy amount taken will be reflected.
  • Although the levy is calculated based on your full UK wage bill, employers will only be able to spend their English proportion on English apprenticeship training.
  • As an employer in England who pays the levy and are committed to apprenticeship training you will be able to get more out than you paid into the levy. The government will provide a top up payment of 10% to monthly funds.
  • Based on current funding rules, the levy can be used to fund existing employee development as long as they meet the criteria set out.
  • From 6th April 2016 employers are no longer required to pay National Insurance Contributions for apprentices aged under 25 years.
  • Apprentices are a devolved policy, which means that the authorities in each area of the UK nations will manage their own apprenticeship programmes. This will include how the funding is spent on the apprenticeship training.  The digital apprenticeship service will support the English apprenticeship system.  Scotland, Wales and Northern Ireland have their own arrangements for supporting employers in accessing apprenticeships.  The government will calculate how much you have to spend through the English system by using data they already hold in relation to the home address of your employees.  They will use this data to calculate what the proportion of your wage bill is paid to employees living in England.  Presently no exact date for this has been announced, it is planned for early 2017.

To discuss your levy needs, fears, hopes, aspirations please just get in touch with us

Get ready for the levy

The countdown is now on for business to prepare for and be ready for the introduction of the Levy.

Getting ready for the levy with WSG Associates can be as simple as 1, 2, 3.  Let WSG Associates take the pain away from you through our partnership approach.


  1. Initial consultation which is completely free of charge.
  2. Carry out a review of your business focusing on approaches to learning and development, leadership and management, resources, related processes, experiences, programme support and progress, centre records and quality assurance.
  3. Engage and Manage.  We will provide you with an ongoing comprehensive management support service.

To discuss your levy needs, fears, hopes, aspirations please just get in touch with us