What Can The Apprenticeship Levy Be Used For?

The apprenticeship levy is a UK government-led scheme introduced in 2017 to fund apprenticeship training throughout the country. Levy funding can be accessed by both levy payers and non-levy payers, and what isn’t universally known is that the apprenticeship levy can be used to fund a wide range of training and development initiatives and not simply traditional trade-based apprenticeships. In this article, we will explain all you need to know about using the apprenticeship levy.

The Apprenticeship Levy: What It Is And What It Can Be Used For

Essentially, the apprenticeship levy is an employment tax on mid to large employers to encourage wider investment in apprenticeships and skill development throughout the economy. All employers with an annual payroll of £3 million or more per year are required to pay the levy at a rate of 0.5% of their total employment bill.

The funds don’t disappear to the Treasury but are collected and placed into a digital account, which levy-paying businesses can use to pay for apprenticeship training and other development services for their employees. Levy payers can use money held in this account to fund any eligible apprenticeship and training service.

Apprenticeship Levy Deadline: Use It Or Lose It

It’s important to note, however, that payers only have 24 months to use these funds before they expire if they haven’t been spent. After this time, expired funds go into a general government pot to fund other businesses. Over the past three years, over £3.3 billion has been turned over to the Treasury. However, if you know that you’re not going to spend your contributions within the timeframe, you can opt to transfer them to a smaller, non-levy paying business in your local area. This can be a good way of increasing skills and strengthening relationships with partners in your supply chain.

Can Non-Levy Payers Access Apprenticeship Levy Funds?

Yes. Non-levy payers – i.e. small employers not required to pay the levy – can still access government funding for apprenticeships. They need to contribute 5% of the training costs for each person, with the other 95% covered by the government. For example, if an EAM Leader ILM level III course costs £5000 per attendee, a non-levy paying employer would need to pay £250 per person to attend.

Using The Apprenticeship Levy

Apprenticeship levy funds can only be spent on approved apprenticeship-based training elements, such as training new members of staff or helping existing employees acquire new qualifications, skills, and knowledge. This includes both on-the-job and off-the-job training, endpoint assessments, and initiatives for training new apprentices and upskilling existing employees.

However, funds can only be spent with government-approved training providers and assessment organisations listed on the Register of Apprenticeship Training Providers (RoATP).

Restrictions

There are certain other restrictions about what the levy cannot be used for, such as:

• Wages, recruitment, travel, accommodation, and other employment costs

• Training that is not part of an approved apprenticeship or training programme

• Administrative or operational costs of running an in-house apprenticeship/training programme (e.g. new laptops for trainees)

• Any training beyond the scope of the government-approved apprenticeship standards or frameworks

Can The Apprenticeship Levy Be Used To Develop Your Existing Staff?

Yes, apprenticeship levy funding is an excellent way to train your graduates and new recruits, no matter what their background. Existing employees can also benefit, but they will be required to implement what they have learned during each workshop from the apprenticeship across 20% of their working time. This helps your employees develop hands-on knowledge and experience and can also boost staff retention by giving them a practical career pathway within your organisation. It’s also a great way to increase your business’s ROI from training.

What About Management Training And Development?

Think of an apprenticeship. It is natural for traditional manual trades to come to mind, and it’s true that many businesses use the apprenticeship levy to fund crucial training for new engineers, electricians, plumbers, welders and other employees, as well as administrative and creative apprenticeships in some cases. However, the apprenticeship levy is also an excellent way to upskill your managers and team leaders. For example, you might want existing managers to take on an apprenticeship in order to learn the skills required to take on a new, more senior position. Training of this kind can also be a great opportunity for new managers, giving them a strong foundation to succeed in their roles in the future.

Find Out More About Our Levy Apprenticeships

Penguin Learning provide high-quality, bespoke management development programmes to help fuel the long-term growth and prosperity of your business. Get in touch today to discuss the ways in which you can unlock the full value of your apprenticeship levy funding.

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