Apprenticeship funding rules for employers

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Apprenticeships Employers Blogs

Apprenticeship funding rules are updated every year by the government and as an employer, you’ll need to be aware of the key points around apprenticeship funding.

You can find the full document available on GOV.UK, but we’ve put together a handy guide explaining the funding rules for apprenticeships starting between 1 August 2021 and 31 July 2022.

Apprenticeship Levy

If your business has an annual wage bill over £3million, you’ll contribute 0.5% of it to the apprenticeship levy for training, upskilling and end-point assessments. Any unspent funds left after two years will be claimed back by the government. Alternatively, you can gift up to 25% of your levy funds to another business to fund their own apprenticeship training.

If your business has an annual wage bill below £3million, you won’t need to pay anything to the apprenticeship levy and will instead be eligible for funding from the government.

Businesses with over 50 employees can get 95% of the apprenticeship costs funded by the government

Businesses with fewer than 50 employees can get 100% of the apprenticeship costs for 16-18 year olds funded by the government and 95% funded for 19+ year olds.

Apprenticeship Service Account

To access apprenticeship funding, you must register for an apprenticeship service account where all levy funds and government apprenticeship funding is automatically deposited.

All apprenticeship fees should be paid for using the funds in your apprenticeship service account (either invested directly by you, gifted from another company or co-invested by the government).

Any additional funds you want to put towards apprenticeships for your business (such as the remaining 5% of costs for SMEs) will need to be deposited in this account.

Apprentice Eligibility

In order to be eligible for funding, apprentices need to have a ‘genuine job’ with you. This means they need to:

Have a contract with you (or a connected charity or company)
Be paid at least minimum wage by you
Spend at least 50% of their working hours in England

When recruiting new candidates for apprenticeships, you’ll have to ensure you select an apprentice who will:

Be over the age of 16 by the time they start the apprenticeship
Have the right to work in the UK
Not be completing another apprenticeship at the same time
Not be completing a degree at the same time.

Spending Funds

Apprentices cannot be asked to contribute towards the cost of their own apprenticeship training or end point assessments – even if they leave the training programme before completion.

Apprenticeship funding can only be used to pay for training and assessments. Any other costs (e.g wages or safety equipment) should be paid for by the employer as per the apprentice’s employment contract.

Funds can be invested in apprenticeships for candidates who have previously completed another apprenticeship at a lower level. Funds may also be used for candidates completing an apprenticeship at the same or lower as a previous apprenticeship if you can prove that this training will provide them with new or significantly different skills.

For apprentices without English or maths qualifications, funding will also be available from the government to help them achieve these before completing their apprenticeship.

The government will also fund any costs associated with making the end point assessment suitable for candidates in need of learning support.

Additional apprenticeship funding incentives

As an employer, you may be eligible for additional funding either for training or paid directly to you if your apprentice is:

Aged 16-18 and newly recruited
Aged 19-24, is newly recruited and has an EHC plan or has been defined as a ‘child in care’
Over 16 and recruited before September 2021.

Apprenticeships are one of the best ways to bring in new talent and upskill existing staff but we know it can be a confusing process. That’s why our experienced team will take the hassle out of the process and guide you through the process from start to finish.

Get support funding apprenticeships for your business.

Find out more about how we can help with your apprenticeship funding or call our team of friendly experts on 03333 222 666.