Who Pays The Apprenticeship Levy?

If you’re an employer with a pay bill over £3 million each year, you must pay the apprenticeship levy. This came into effect from 6 April 2017. Read guidance on how to pay the apprenticeship levy.

You will report and pay your levy to HMRC through the PAYE process.

Register To Use The Service

If you are a levy-paying employer, you need to create an account on the governmental website create an account on the apprenticeship service to:

• receive levy funds for you to spend on apprenticeships
• manage your apprentices
• pay your training provider
• stop or pause payments to your training provider

For non levy-paying employers, click on this link to access the Government's guidance for non-levy paying employers.

Spend Funds In Your Apprenticeship Service Account

To spend funds in your account, you need to:

1) Choose a training provider

2) Agree a price and payment schedule

3) Pay for training and assessment with funds through your apprenticeship service account

Top-ups and Expiry of Funds

The government will automatically add 10% to the funds in your apprenticeship service account. They will apply this 10% top-up monthly, at the same time the funds enter your account.

Funds that you don’t use will expire 24 months after they enter your account. Whenever a payment for training is taken from your account, the service always uses the funds that entered your account first. Your apprenticeship service account will let you know when funds are due to expire.

Key facts you should know about the Apprenticeship Levy

https://www.gov.uk/government/news/key-facts-you-should-know-about-the-apprenticeship-levy

Government Levy Statistics

For statistics covering apprenticeship starts, apprenticeship service registrations and commitments click this link.

ESFA Apprenticeship Funding Rules (Education and Skills Funding Agency)

Training providers, employers and employer providers are all subject to the Education and Skills Funding Agency funding rules. The rules change every academic year. A link to the latest funding rules, which came into effect on 1st August, is show below.

Apprenticeship funding rules - GOV.UK (www.gov.uk)

For more information please contact Apprenticeship employer helpline:

Email: nationalhelpdesk@apprenticeships.gov.uk

Telephone: 0800 0150 600

Funding Model (Funding Bands)

The upper limit caps - the maximum:

• amount of digital funds an employer who pays the levy can use towards an individual apprenticeship
• that government will ‘co-invest’ towards, where an employer does not pay the levy or has insufficient digital funds
• Employers negotiate the best price for the training they require. The negotiated price does not include: VAT
• English and maths (up to level 2)
• Learning support
• Additional payments
• Employers can spend more than the funding band limit using their own money (not the levy)
• Funding bands do not have a lower limit

The government announced it's revised approach to funding bands for apprenticeship standards that apply to apprenticeships which commenced after 1st August 2018. This document shows the upper limits for each of the 30 funding bands and explains how the funding works in practice. To view the document please click on the link below.

Apprenticeship Funding in England

The latest funding guides are available by clicking the links below.

Apprenticeship Funding Rules - Guidance for Employers and Training Organisations

Click on the links below for detailed information about how the apprenticeship levy works. There is also a link to the Government's 'Become an Apprentice' webpage which covers the National Minimum Wage salary levels and what an apprentice can expect to be paid. This varies depending on their age. 

Apprenticeship Levy - How it works 

Become an Apprentice 

IRRV's rationale for using subcontrators

In line with new Education and Skills Funding Agency rules, all main apprenticeship providers must publish the rationale for using subcontrators to deliver elements of their course programmes. The IRRV deliver just under 100% of the course programme. The document below provides details of the two areas in which we procure services from external organisations, to enhance the experience for learners and to provide functional skills qualifications in English and maths, as required for each learner.

IRRV's rationale for using subcontractors 2024

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Who can be a subcontractor?

A subcontractor is an organisation that is engaged in a contractual and legally binding arrangement with one or more lead providers, to deliver education and training provision that the Education & Skills Funding Agency (ESFA) funds.

Providers of adult education and training services, including apprenticeships and traineeships must make a yearly subcontractor declaration. This includes organisations who hold:

• funding agreements and contracts
• an ESFA apprenticeship agreement for levy-funded apprenticeships and have an approved commitment on the apprenticeship service with at least one employer

You need to make your subcontracting declarations through the Skills Funding Service (SFS)

Using Subcontractors in the Delivery of Apprenticeships

The Government's Subcontracting Policy gives the background to this area and provides examples.

Subcontracting: For The First Time

If you want to subcontract for the first time, you must obtain the ESFA’s written permission before doing so.

Subcontracting for the first time: seeking written approval(PDF, 150KB, 4 pages) describes the process for getting permission to subcontract funding for education and training.

Along with the request to subcontract, you must also provide a report from an external auditor.

Subcontracting: Second-Level

If you want to subcontract to a second level (where a subcontractor further subcontracts to another legal entity), you must first obtain the ESFA’s written permission. You must obtain permission from the ESFA to subcontract to a second level every year.

You can find the information you need in order to review requests from providers to subcontract to a second level:

Subcontracting to a second level: seeking written approval. _{(PDF, 156KB, 6 pages)}