Funding an apprenticeship

Funding an apprenticeship

An apprenticeship is an extremely cost-effective way to bring new skills and knowledge to your businesses. Funding varies for apprenticeship depending on the duration of the programme and the rates set by the Government.

If your company pays the Apprenticeship Levy, you can use this to fund your programme. If not, the Government will cover 95% of the apprenticeship training costs, leaving you to cover the remaining 5%. We’re here to make sure make the most of the levy and other funding streams.

What is the apprenticeship levy?

The apprenticeship levy requires all UK employers with a wage bill of over £3 million per year to pay a levy toward apprenticeships.

The levy is payable at 0.5% of the total pay bill minus an annual levy allowance of £15,000 directly to HMRC through the PATE process and is held in your Digital Apprentice Service (DAS) account.

As well as the levy allowance, the government also tops up your levy payments by 10%, so for every £1 you pay towards the levy, you may spend £1.10.

Employers pay the Apprenticeship Levy directly to HMRC through the Pay-As-You-Earn (PAYE) process. We can assist you in creating your DAS account or you can set it up yourself. 

Levy funds in your DAS account are available for 24 months from the date of payment. Any amount that remains unspent after that period expires is reclaimed by HMRC, including the 10% contribution, so it’s important to spend them sooner rather than later.

What can the levy be spent on?

As an employer, you can use your Apprenticeship Levy funds to provide apprenticeship training to both newly recruited apprentices and existing employees.

Payments are made directly from your DAS to the training provider each month, for as long as the apprentice remains on the course. Your Levy funds can be sued to pay for the training and the assessment, not for the apprentice wage or travel expenses.

Not a levy-payer? Find out how to reserve your funding