The levy is designed to encourage employers to develop their workforce through apprenticeships. Employers who are committed to training will be able to get back more than they put in.
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For businesses with payroll over £3m
All businesses operating in the UK with an annual wage bill over £3m will be required to invest 0.5% of this into a digital account, with the government contributing an additional 5% to top up your account. This money is then used to fund the apprenticeships your business commits to.
The levy allowance is calculated on a monthly basis and will accumulate throughout the year, with unused allowances being carried over from one month to the next. Any unspent levy funds in your digital account will expire after 24 months.
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For businesses with payroll less than £3m
There are certain employers who will be required to contribute towards the cost of their apprenticeship training outside of the levy system, such as those whose pay bill is less than £3m per tax year. For these businesses, the cost they will need to meet is dependent upon the number of employees on their payroll. For companies with 49 or fewer employee’s small business support may be available. Please see our page "advice for employers" for more details.
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How do I access my digital account?
Your Levy funds will be allocated to your digital apprenticeship service (DAS) account. You will need to create this account through the HMRC website.
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How is the levy taken?
The levy will be payable through the PAYE system alongside income tax and National Insurance payments.