How to spend your apprenticeship levy

We all know that apprenticeships are a great way to boost your business, and that the apprenticeship levy provides a real incentive for businesses of all sizes to strengthen their workforce. 

While you may have heard of the apprenticeship levy, do you know how best to use it? We explain all below. 

What is the apprenticeship levy?  

The apprenticeship levy is a tax on UK employers with an annual wage bill over £3 million or more each year.   

It was introduced in April 2017 as part of the Government’s apprenticeship reforms, and is used to fund apprenticeships, support business productivity and grow quality vocational training and employment.   

The levy can be spent on a number of elements related to apprenticeships excluding travel costs, management costs, required licenses, wages or the cost of setting up the apprenticeship. 

If you’re a levy-paying business, you’ll manage your levy funds, manage your apprentices and pay your training provider through an account with the government’s Apprenticeship Service.  

Remember that our expert team has years of experience within the apprenticeship sector and will be there to guide you through the whole process.  

How to spend your apprenticeship levy 

Levy funds must be spent on training with an approved training provider such as ourselves, but how you spend it depends on your business needs. 

1. Recruit new apprentices 

Apprenticeships are often thought of as a way to bring new members into your business. You can train them in the specific vocational skills they will need to be successful in your organisation without any additional costs to your business. 

Anyone over the age of 16 and not in full time education can become an apprentice, and there is no upper age limit on apprenticeships. Due to the wide variety of apprenticeship courses available, you can spend the apprenticeship levy on management apprentices that could one day lead your organisation rather than on junior roles.   

Our Recruitment and Engagement Team are on hand to connect you with a pool of talented learners and find you your ideal candidate. 

You can read more about the recruitment process here.  

2. Upskill employees 

Upskilling existing employees helps them to gain new knowledge and develop new skills. In fact, employers who invest in upskilling retain their employees for much longer and have significantly lower turnover levels, with employees showing higher levels of job satisfaction and company loyalty. 

Using the apprenticeship levy to upskill existing staff benefits large organisations who would otherwise lose that money to the government as well as smaller businesses who don’t have surplus funds to invest in training. 

Our employer partner, Cheshire Constabulary, explains how upskilling their existing employees works for them. 

3. Conducting end-point assessments 

Once your staff member (new or existing) has completed their apprenticeship training, they will need to go through an End Point Assessment (EPA) to evaluate what they have learned and if they can conclude their training.  

These assessments are conducted by independent organisations and therefore have a separate cost associated with them. Apprenticeship levy funds can be used to pay for the end point assessment to ensure the apprentice is fully qualified. 

4.Levy gifting 

If you’re a large employer that hasn’t been able to use up your apprenticeship contributions, then levy gifting could be the solution for you.  

Instead of simply returning unused funds to the government, you could ‘gift’ up to 25 per cent of your funding to help smaller businesses train their workforce through apprenticeships. Levy gifting can help you form relationships with other organisations, build your reputation as a caring brand and support your CSR agenda. 

It’s a great way to develop the next generation of industry leaders, according to our latest levy gifting partner, SPIE UK.  

If you’re an SME and have fewer than 50 employees, you’ll be eligible for 100% funding for individuals aged 16-18. Our dedicated Levy Gifting team do all the hard work for you and can help you to access the right funding for your workforce while guiding you every step of the way. 

Call 03333 222 666 to speak to a member of our expert team.