10 things we’ve learnt from the government’s updated guidance on the Apprenticeship Levy

April 29 2016  —  by Charlotte Domanski, Knowledge and Research Manager, Talent & Skills, Business in the Community

The government has released some updated guidance for employers on the Apprenticeship Levy and how the Digital Apprenticeship Service will work. Here are 10 new things that we’ve learnt:

  1. Employers will have 18 months to spend their funds on apprenticeship training, which are worth 110% of their monthly Levy payments. Their digital account will work on a first-in, first-out basis, with payments from employers’ digital accounts automatically using the funds that entered the account first.

  2. Employers will be responsible for calculating, reporting and paying their levy to HMRC through the PAYE process alongside tax and NICs. If employers calculate that they need to pay the Levy in any given month, they will need to declare this and include it in their usual PAYE payment to HMRC by the 19th (or 22nd if reporting electronically) of the following month.

  3. Employers will pay the Levy on their whole UK wagebill but will only receive the portion of funding they can spend on training in England through the Digital Apprenticeship Service. The government will use the data it holds on employees’ home addresses to work out what proportion of a wage bill is paid to employees living in England and use this to calculate the funding.

  4. If an employer already contributes to one of the existing industry training levies, they will still be required to pay the Apprenticeship Levy. The Industry Training Boards for the construction, engineering construction and film industries will consult their members on potential changes to their existing levy arrangements, rather than not paying the new Apprenticeship Levy.

  5. When an employer takes on an apprentice who is between 16 and 18 years old at the start of their apprenticeship, has a learning disability or is a care leaver aged 19 to 24, they will receive a payment to help meet the extra costs of employing them. This will be paid through the training provider.

  6. When an employer buys apprenticeship training through the Digital Apprenticeship Service, they don’t need to have enough funds in their digital account to cover the entire cost of the training at the start. As payments are taken from the digital account each month they just need to have enough funds to cover the monthly cost of each apprenticeship chosen.

  7. By 2020, all employers will be able to use the Digital Apprenticeship Service to pay for training and assessment for apprenticeships. Employers who don’t pay the Levy won’t use the Digital Apprenticeship Service to pay for apprenticeship training and assessment until at least 2018.

  8. Employers who use more than one PAYE scheme will be able to register for more than one digital account. Employers will receive their funds into their account in monthly arrears, so will receive their first funds in late May 2017.

  9. Employers will not be able to use their funds to pay for training for apprentices who were accepted onto their programme before April 2017.

  10. Groups of legally connected employers (for example, members of a group of companies) will be able to pool their funds into a single digital accounts. However, other unconnected employers will not be able to pool their funds into one account.

For more information about creating sustainable apprenticeship programmes that form part of a strong talent pipeline, take a look at our Apprenticeship Toolkit where you will be able to find a range of useful free resources and employer case studies.


Charlotte Domanski

Charlotte Domanski, Knowledge and Research Manager, Talent & Skills, Business in the Community