Who pays for the training? - The Levy explained

In April 2017, the government introduced the Apprenticeship Levy, which requires all employers operating in the UK with a wage bill of over £3 million to contribute to a pot of money that can be used to fund apprenticeship training.

How does the Apprenticeship Levy scheme work?

The levy is essentially a tax on larger businesses, designed to fund apprenticeship training and help address the skills gap in the UK. Employers with a wage bill of over £3 million must pay 0.5% of their wage bill into the levy pot, which they can then use to fund apprenticeship training for their employees. If they do not use it, they lose it!

But it is not all about the big organisations. Smaller employers who do not pay the levy can also access funding for apprenticeship training.

Changes in 2024

There is good news for SME businesses! From 1st April this year (2024), the government will fully fund all apprenticeships for small businesses. This means they will pay the full cost for apprenticeship training for anyone up to the age of 21 and there is no training cost to the smaller employers.

There will be an increase in the amount of funding the larger levy-paying employers can pass on to other businesses (levy gifting). Currently, it stands at 25%, this will be increasing to 50%. This means more people and more organisations can access funds for training and start enjoying the benefits of hiring an apprentice.

This means we have more money ‘in the pot’ and an easier way to share the wealth allowing for more support when hiring apprentices and apprenticeship opportunities can be made available.

What can I use the Levy for?

The levy can be used for Apprenticeship training and assessment ONLY. The training must be with an approved training provider and assessment organisation and can not be used on other costs associated with your Apprentices (such as wages or travel costs) or for other types of training or ‘top-up’ qualifications.

It is there to support employers to take on new apprentices and train their existing staff.

How can Umbrella help?

We can help support every-sized hospitality business when it comes to receiving and spending their levy funding to the max, including assisting with the levy gifting process.

We are experts in our field, filled with the passion, knowledge and experience of hospitality to help support you and your organisation with the right apprenticeships.

What should I do next?

Are you interested in hiring an apprentice in your business?

Click here to reach out to our team.

Want to know more about accessing training for you or your team?

Check out our courses, here.

Are you thinking about starting an apprenticeship?

Start your journey, by talking to Zak here.