Apprenticeship training in England is funded by the government, either in full if you pay the Apprenticeship Levy or up to 95% if you have a total salary bill of less than £3 million each year.
If you have a total salary bill of more than £3 million each year, you are required to pay a tax that equates to 0.5% of the total bill. This tax is called the apprenticeship levy.
The levy is used to create a funding account which you can use to cover the cost of apprenticeship training within your organisation – up to the maximum amount of funds allocated. The bigger your pay bill, the larger your levy account fund. Each apprenticeship you undertake will be funded up to the funding band maximum for the apprenticeship standard as agreed by the gover, and you have 24 months to use the fund allocated each year.
If you have an annual salary bill that is less that £3 million you are not required to the pay the levy. The government will fund 95% of the cost of apprenticeship training, up to the funding band maximum, and you are required to contribute the remaining 5% (plus any difference if required).
Arranging your apprenticeship: Government online portal
From January 2020, all employers regardless of size can now access the government’s digital portal for arranging apprenticeships. Creating an account is quick and easy. Once you’re set up you can manage apprenticeships for your business with greater control and ownership over training providers such as us, as well as funding, payment and assessment organisations.
- The apprenticeship service is only available for apprenticeship starts after 1 January 2020.
- You can ‘reserve’ government funding for up to three months if you need time to plan apprentice provision within your business.
- To reserve funding you will need to provide an estimated start date for the apprenticeship, which must be within the allotted three months.
- You can use the three months to choose your training provider, create a vacancy and recruit your apprentice, after which your reservation will become a commitment.
- If you do not secure an apprentice start within the allotted three months, the reservation will expire and the funding will be released.
- An initial test phase will run from January to March 2020 alongside existing contracts, with a full transition expected by August 2020.
Funding band maximum
All apprenticeship standards have a funding band maximum. This is how much the government will pay for an apprenticeship.
Different standards have different band maximums depending on what the training involves. If a training provider chooses to charge more for their apprenticeships than the funding band maximum, the employer is required to pay the difference.
All our of our apprenticeships are within the funding band maximum.