Apprenticeship Funding

In 2017 the UK Government introduced an employer levy to encourage all employers to support apprenticeship training. This levy requires employers to contribute 0.5% of their annual PAYE bill. The government allocated a £15,000 allowance to each employer to offset this cost. Therefore only employers with an annual PAYE bill in excess of £3m are required to make a financial payment. This payment is made directly to HMRC through the company PAYE returns. These funds can then be accessed by the employer one month after being paid, through their Digital Apprenticeship System account.

These funds can only be used to fund apprenticeship training and assessment.

Currently only England has confirmed policy for the distribution of levy funds collected. For information regarding the devolved nations, please click on the title “Scotland, Wales and Northern Ireland” in the additional information and FAQ’s section below.

Funding Overview

There are currently 3 funding streams available for employers.

  • Levy funded apprenticeships
  • Co-investment funded apprenticeships
  • Fully Government funded apprenticeships

For a more detailed explanation of each of these funding streams, please click the relevant heading below.

Additional Information and FAQ's

Levy Funded Apprenticeships

Employers who pay the apprenticeship levy have a Digital Apprenticeship System account, through which they can pay for apprenticeship training and assessment. When an apprentice starts, the employer must set the apprentice up on the Digital Apprenticeship System (DAS) and select a training provider. Once the training provider commences training delivery and submits a funding return to the Education and Skills Funding Agency (ESFA), the ESFA use the funds from the employers DAS account to pay the agreed training provider for the training and assessment of that apprentice. These funds can not be used to pay for any resit costs or travel and accommodation.

If you require further information please contact Julie James. [email protected]

Co-investment funded apprenticeship are available to all employers who are not required to pay the apprenticeship levy, as well as levy paying employers who have used their available levy funds. The Government will contribute up to 95% of the cost of training and assessment, with the employer required to contribute the remainder. The employer contribution is invoiced on a monthly basis.

If you require further information please contact Julie James. [email protected]

A fully funded apprenticeship is available for employers who employ fewer than 50 members of staff, have a PAYE bill of less than £3M and who recruit an apprentice aged 16-18 at the start of their apprenticeship. Under these conditions the Government will cover up to 100% of the cost of the training and assessment. This is aimed at SME’s to support them with the cost of apprenticeship training.

If an employer who employs fewer than 50 members of staff, has a PAYE bill of less than £3M, but chooses to recruit an apprentice aged 19 or over, then the funding for the apprenticeship reverts to Co-investment funding, meaning the Government will cover up to 95% of the cost of training and assessment.

If you require further information please contact Julie James. [email protected]

Employers will receive a payment of £1000 towards the additional cost associated with training if, at the start of the apprenticeship, the apprentice is:

  • aged between 16 and 18 years old (or 15 years of age if the apprentice’s 16th birthday is between the last Friday of June and 31 August); or
  • aged between 19 and 24 years old and has either an Education, Health and Care (EHC) plan provided by their local authority or has been in the care of their local authority.

These payments will be paid as follows:

  • 90 days after the apprentice starts, 50% will be paid if the apprentice is still undertaking their apprenticeship; and
  • 365 days after the apprentice starts, the remaining 50% will be paid if the apprentice is still undertaking their apprenticeship.

These payments are initially paid to the Training Provider, and must be passed to the employer within 30 days of receipt.

The Government want to encourage employers to embrace apprenticeships to help address some of the skills shortages in the UK.  By allowing employers greater control over apprenticeship funding, they are becoming more involved in the support and development of their apprentices. When funds are added to an employers Digital Apprenticeship System  account by HMRC, they are date stamped. Any fund not used up after 24 months will be taken back by HMRC and used to support other employer apprenticeship.  It is therefore vital that you plan effectively to utilise your fund to extract maximum value.

Although the Apprenticeship Levy is applicable to all employer within the UK, the devolved nations have yet to confirm how this will be redistributed to employers.  Different funding arrangement are available for each of these options. Please call us directly to discuss your individual need so we are able to identify the options, and work with you to find the best solution.

If your payroll is likely to exceed the threshold at some point in the future, then the information provided here will help you to prepare. If it is unlikely that you will pay the levy, then you can go straight to this section.

You can only spend it on training and assessing apprentices against a government approved apprenticeship, working in partnership with a government approved Training Provider i.e. the Training Provider must be on the Register of Approved Training Providers.  Levy funding can’t be used to fund travel or accommodation.

Almost anyone*.

We tend to think of apprentices as young people, typically 16 years of age having just left school; anyone of any age, in any role can be an apprentice if they need to acquire new skills and knowledge that they do not currently possess to be fully competent in their role. So, you can spend your levy upskilling your current staff and training and assessing newly recruited staff in the future; 16 year olds, 46 year olds, there is no limit. But remember, they must follow a government approved apprenticeship and you must work in partnership with a government approved Training Provider.

 

You can visit the Institute for Apprenticeships and Technical Education to view a list of Apprenticeships currently available.

You use a government online account called the Digital Apprenticeship Service (DAS) to manage your levy funds. DAS allows you to forecast your levy payments (over a period of up to 24 months), select approved training providers, manage your apprentice data and view payments, receipts and balances, just like a bank account.

For information regarding the Digital Apprenticeship Service account and how to us it, please visit www.gov.uk

You are free to select any approved training provider from the list on DAS but we (ProVQ Ltd) my already be working successfully with you in this area right now and have a very strong track record and reputation for quality.

For details of apprenticeships currently offered by us, please see our Apprenticeships page.

To select ProVQ as your provider using DAS you will need to enter our UK Provider Reference Number (UKPRN) and this is:
10022503

Should need any help with any aspect of this process, please contact us and we’ll provide all the support you need.

Government funding is non-vatable. However, if you fall into the co-investment funding category you will be charged VAT on your  contribution.

We are continually developing new programmes to support you. Where appropriate we are aligning these to  Apprenticeship Standards so these can be funded by your levy or by the government by up to 95% through co-investment funding.

Contact us and we will support you in any way we can.

Notes
*We will be able to advise you on funding eligibility.
** An apprentice starts their programme when all apprentice start forms are completed. This is often some weeks after you apprentice starts employment with you as formalised education must have started before funding can begin. We will advise you on start dates so you can factor this in against the date of birth of your apprentice.