Apprenticeship Levy Support for Employers in Somerset
The Apprenticeship Levy is a UK tax on employers introduced in 2017 to fund high-quality apprenticeship training across England. Employers with an annual pay bill of more than £3 million must pay 0.5% of their total pay bill into the levy each month. These funds are held in a digital apprenticeship service account and can be spent on apprenticeship training and assessment for apprentices employed by the business.
Levy funds can be spent only on approved apprenticeship training and assessment costs; they cannot be used for wages, travel or other non-training costs. The Government also adds a 10% top-up to levy funds credited into your account.
New and Emerging Apprenticeship Levy Updates
The apprenticeship funding landscape is evolving as the system transitions towards a Growth and Skills Levy by April 2026, designed to simplify funding and broaden access to training. These reforms aim to support foundation apprenticeships, shorter training pathways, and increased employer flexibility.
In addition, recent government investment packages are increasing access to apprenticeships for young people and covering the full cost of apprenticeships for eligible under-25s, particularly in SMEs, to help tackle youth unemployment and skills shortages.
There are also ongoing funding rule updates each year (e.g. funding rules for 2025-2026) which employers and providers should review to understand how funding and compliance requirements are changing.
Read the latest updates here:
For Levy-Paying Employers: The Who, What, Why and How.
The Apprenticeship Levy is paid by UK employers with an annual pay bill of more than £3 million.
What is the Apprenticeship Levy?
The Apprenticeship Levy is a UK tax on employers introduced in 2017 to fund high-quality apprenticeship training across England. Employers with an annual pay bill of more than £3 million must pay 0.5% of their total pay bill into the levy each month. These funds are held in a digital apprenticeship service account and can be spent on apprenticeship training and assessment for apprentices employed by the business.
Levy funds can be spent only on approved apprenticeship training and assessment costs; they cannot be used for wages, travel or other non-training costs. The Government also adds a 10% top-up to levy funds credited into your account.
What You Can Do With Unspent Levy
Unspent funds in your digital account can be transferred to other employers, helping them fund apprenticeships. You can transfer up to 50% of your levy. Transfers must be agreed through the apprenticeship service, and you can choose which organisations to support, such as local SMEs or charities. Funds transferred go 100% towards the training and assessment costs of an apprentice up to the funding band maximum.
Important: Transferred funds are committed over the duration of the apprenticeship. You remain responsible for training costs until the apprenticeship is completed, but not for the apprentice’s wages or other employment costs.
Why You Pay the Levy
Large employers (with payrolls over £3 million) pay the levy to support apprenticeship training across the economy. The aim is to encourage investment in skills development and ensure sustainable funding.
Why Giving Unspent Levy to SMEs Is Valuable
Large levy-paying employers can help smaller employers access apprenticeship training by transferring unused levy funds. This extends opportunity, supports skills development across supply chains, and strengthens local workforces. Smaller businesses (including those that do not pay the levy) can use these transferred funds to fully cover training and assessment costs, boosting access to apprenticeships.
Supporting SMEs through levy transfers also raises the profile of your business as one that invests in local talent and training, and can contribute to broader workforce development goals in your community.
How is the levy paid?
Employers who pay the levy contribute it monthly through the PAYE system, alongside Income Tax and National Insurance. The funds are then credited to their digital apprenticeship service account, with an additional 10% government top-up.
How Can I Transfer My Unspent Levy?
Talk to us! Our team of experts can find employers who want to receive a transfer. Contact us for free and we can get the ball rolling.
For Non-Paying Employers: The Who, What, Why and How
Who Is It For?
Small and medium-sized employers (SMEs) who do not pay the apprenticeship levy.
What Funding Is Available?
If your business does not pay the apprenticeship levy, you usually contribute a small percentage (typically 5%) towards apprenticeship training costs, with the government funding the remaining 95%.
Why Does This Matter for SME’s
Apprenticeship funding helps SMEs grow and upskill their workforce without the full cost burden of training. It removes financial barriers, supports recruitment, and enables businesses to invest in future talent.
How can SMEs access additional funding?
SMEs without levy funds can receive levy transfers from larger employers. These transferred funds can cover 100% of training and assessment costs, making apprenticeships more affordable and accessible.
For further guidance or information – talk to us! Our team of experts can support you through the process and give guidance for your specific business needs.
Contact us about levy transfers
Speak to us to find out how you can receive a levy transfer from a larger local employer, or Transfer your levy to a smaller local employer
Contact us