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When Do Apprenticeship Levy Funds Expire?

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Apprenticeships Employers Blogs

The Apprenticeship Levy is a tax on UK employers with a pay bill over £3 million each year and is charged at 0.5 percent of the employer’s annual pay bill

Levy payments are made monthly to HMRC through the PAYE process and held in an Apprenticeship Service account. They can then be  used to fund apprenticeships for new or existing staff.  

The idea behind the levy is that it encourages large organisations to invest in training for  their staff. However, only 4% of businesses in the UK are spending their full apprenticeship levy funding. 

In this article, we will be helping you understand how long your apprentice levy funds last before they expire, what happens to unused funds, and how levy payers can make the most of their funds. 

How long do apprenticeship levy funds last? 

Levy funds have to be used within 24 months of their original deposit date, for example, levy funds paid in March 2023 will need to be spent by March 2025.    

What happens to unused apprenticeship levy funds? 

If your levy funds have not been spent within 24 months, that money goes back to the government to provide 95%-100% apprenticeship funding to SMEs. 

Levy funds do not go to waste, as they are still used to train people in multiple industries, closing skill gaps and improving the quality of the UK workforce, which can still benefit your organisation. 

How can you make use of your expiring apprenticeship levy funds? 

The Funding Projection Tool in your Apprenticeship Service Account can help you see how much funding will expire each month so you can plan to use it in advance.  

If your business is not in a position to take on a new apprentice to make use of these funds, you have a couple of other options to consider: 

Upskill existing staff 

You can use your levy funds to upskill an existing member of staff via an apprenticeship programme.This can help them learn new skills, progress their career, and take on new responsibilities within the business. 

Alternatively, if your business is in the position to do so, you could hire a new apprentice!  You can conduct a skills gap analysis to see how apprenticeships can help upskill your workforce to meet business needs now, and in the future.

Gift 25% of your apprenticeship levy funds to an SME 

You can choose to gift up to 25 percent of your unspent levy funds to an SME and become a sponsor of vocational training in that industry. This is great for CSR and developing industry relationships (with no additional costs to do so). 

Across Total People, we have dedicated and highly equipped teams to ensure your business objectives are achieved. We are ideally placed to offer impartial solutions to using your Apprenticeship Levy and can co-create training that aligns to your organisational needs. 

Make the most of your levy funds before they expire by recruiting an apprentice with Total People.

Find out more about how we can help with your apprenticeship funding or call our team of friendly experts on 0333 242 9051.

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