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The apprenticeship levy was introduced by the Government in April 2017. It can be used to pay tuition costs for new apprenticeship starts. Employers with a pay bill over £3 million each year pay the levy. The levy costs an employer 0.5% of their payroll costs annually. The Government applies a 10% top-up to your digital account.
Levy payments are managed by HMRC through the PAYE process. More information about Levy payments and PAYE is available here. Funds enter your account each month after you have declared the levy to HMRC. Funds expire 24 months after they enter account if they are not spent on an eligible apprenticeship.
If you are a levy-paying employer, you can create an account on the apprenticeship service to:
receive levy funds for you to spend on apprenticeships
manage your apprentices
make or manage training provider payments (e.g a university or college)
You can use funds in your account to pay for training and assessment for apprentices that work at least 50% of the time in England.
You can only fund up to the funding band maximum for that apprenticeship from the levy- for example the maximum funding band for teaching is £9,000 per apprentice. Once training starts, monthly payments will be taken from your service account and sent to the provider. If the cost of training and assessment is more than the funding band maximum, you will pay the difference with other funds from your own budget (typically through invoices).
You can’t use levy funds to pay for other costs associated with your apprentices (such as wages, travel and subsidiary costs, work placement programmes or the setting up of an apprenticeship programme).
If you don’t have enough funds in your account to pay for training in a particular month, you will be asked to share the remaining cost tuition costs for that month with the government. This is called co-investment. With co-investment, the employer pays 10% of the outstanding balance for that month, and the government will pay the remaining 90% up to the funding band maximum.
The full funding rules are set out in Apprenticeship funding: rules and guidance for employers.
From April 2018, non-levy paying employers can set up arrangements with levy payers who may agreed to transfer some of their levy funds to you so you can pay for apprenticeship training. This might happen if you are in a supply chain or work closely with an employer who has an interest in your organisation taking on apprentices.
For more information please see the government guidance on transferring funds.
If you are paying for apprenticeship training via a transfer of funds both the Oxford Brookes and our partner Colleges can offer you apprenticeship training.
For Apprenticeships beginning before 2019, non-levy paying employers can only use apprenticeship providers who have been awarded a Government allocation to provide apprenticeship training for non-levy employers (unless a levy payer agrees to transfer you funds as outlined above).
Unless you are covering the cost of an apprenticeship via a levy payer transferring funds, Oxford Brookes cannot offer apprenticeships to non-levy payers in 2018. However, a number of our partners including Abingdon and Witney College, Solihull College and University Centre, Swindon College and Wiltshire College can offer apprenticeships to non-levy payers.
Non levy payers pay 5% towards to the cost of apprenticeship. The government pay the remaining 95% (up to the funding band maximum). You will need to agree a payment schedule with your training provider.
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