Apprenticeship Levy – How will businesses be affected?

What is the Apprentice Levy?

Announced by the Chancellor in last year’s Autumn Statement, the Apprenticeship Levy is expected to raise £3 billion annually to supplement Government apprenticeship funding.

Here are the facts:

  • If your payroll bill is in excess of £3 million, you will have to pay the Apprenticeship Levy
  • The levy applies to England only
  • It comes into effect on 6 April 2017
  • The levy rate is 0.5% (gross) of your total annual pay bill and paid through PAYE
  • You will pay regardless of whether you train apprentices or not
  • Any money reclaimed will be in the form of an e-voucher. With this e-voucher, you’ll be able to buy Apprenticeship training from approved providers.
  • All employers have an allowance of £15,000 to offset against their levy liability. The levy allowance is not a cash payment.
  • Employers in England who pay the levy will be able to get out more than they pay into the levy, through a 10% top-up to their digital accounts.
  • 16-18-year-old incentive payment (£1000 to the employer, £1000 to provider).
  • There will be 15 funding bands for frameworks and standards.
  • Non-levy paying employers won’t use the digital Apprenticeship System to pay for training until 2018.

What can the Apprenticeship Levy be spent on?

Digital funds and government funding can be used for:

  • Apprenticeship training and assessment
  • Against an approved framework or standard
  • With an approved training provider and assessment organisation
  • Up to the funding band maximum for that Apprenticeship

Digital funds and government funding can’t be used for:

  • wages
  • travel and subsistence
  • managerial costs
  • traineeships
  • work placement programmes
  • the costs of setting up an Apprenticeship programme

Non-levy paying businesses

Small businesses will receive more support for Apprenticeships under new rules released by the Government, which come into effect in May 2017. Instead of paying a full third of the cost of Apprenticeships, as per current rules, non-levy paying employers (those with an annual pay bill of less than £3 million) will pay just 10%, with the Government paying the remaining 90%.

This is great news for smaller employers who want to make the most of Apprenticeships but are concerned about making up costs from their often limited training budgets.

There are also positive changes for employers delivering apprenticeships to young people aged 16-18. The current discount scheme will be replaced with a £2,000 incentive payment, evenly split between the employer and the education training provider.

Employers with fewer than 50 staff who deliver apprenticeships to young people (16-18) will no longer receive the £1,500 AGE grant (expiring at the end of the 16/17 academic year) and will instead have their Apprenticeships funded in full by the Government.

Find out how the College can support your business and your future apprenticeship training needs, contact our Employer Services team.

Wendy Robinson, Head of Employer Services – 01606 720527

Jo Talbot, Employer Services Engagement Manager – 01606 720548

Our apprenticeships cover the following sectors


Want to get paid to earn a degree-level qualification? You can at Mid Cheshire College thanks to our new Higher Apprenticeship courses.

You’ll work towards a nationally recognised qualification demonstrating your understanding and expertise in your chosen industry. You’ll combine assessment work with vital real-life experience, putting your knowledge into action at work.

You’ll follow a bespoke learning plan, created collaboratively by your employer and Mid Cheshire College, and designed to give you the most relevant teaching and training for your chosen industry.

You’ll complete the apprenticeship with a National Vocational Qualification (QCF) equivalent to a Bachelor’s degree, as well as a portfolio of completed work, a Technical Certificate, and proven on-the-job experience.

Entry requirements for Higher Apprenticeships are flexible, as apprentices will come from a range of education and employment backgrounds. If you’d like to discuss Higher Apprenticeships, get in touch with one of our advisors.

Want to find out more about gaining a professional qualification while you work? Get in touch now to discuss the right apprenticeship opportunity for you.

Carole Timperley
Director of Business Development and Partnerships
01606 720677
Darryl Jones
Business Development Manager
01606 720548
June Tully
Head of Employer Services
01606 720615
Jo Talbot
Head of Employer Services
01606 720527