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Unlock your workforce potential: a guide to the Apprenticeship Levy

Upskill your existing employees or train new talent — without increasing your training budget. Maximise your levy funds and start building a future-ready workforce today.

Apprenticeship Levy explained

The Apprenticeship Levy is one of the most effective ways for UK businesses to fund training and upskill employees at no extra cost. Yet, many organisations miss out on using their funds before they expire.

Introduced in April 2017, this government-led scheme funds apprenticeship training for businesses of all sizes, boosting employee engagement and closing skills gaps.

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Who pays?
Employers with a pay bill over £3 million
Levy rate
0.5% of your total annual payroll (total earnings subject to Employer Class 1 National Insurance contributions)
Annual allowance
£15,000 to offset costs
Funds expiry
Unused funds expire after 24 months

Apprenticeship levy rules: what employers need to know

  • Only approved training providers (like Boom) can deliver levy-funded training.

  • Levy funds expire after 24 months if unused.

  • Apprentices must spend at least 50% of their time working in England.

  • Up to 50% of levy funds can be transferred to another business, including those in your supply chain.

Not an Apprenticeship Levy payer?

Option 1

Get 95% of your training costs covered

If your pay bill is less than £3 million, you don’t pay the levy, but you can still access 95% government funding for apprenticeship training. Your business only contributes 5% of the cost, managed through your Apprenticeship Service account.

Option 2

Levy fund transfers for SMEs

Smaller businesses can benefit from levy fund transfers, making it easier to fund training without additional costs. Large employers can transfer up to 50% of their levy funds each year to support SMEs.

Why choose an apprenticeship programme with Boom?

  • Flexible learning

    Apprentices train around their work schedules without affecting productivity.

  • Immediate business impact

    Skills are applied to real company challenges from day one.

  • Real-world mentorship

    Learners are guided by experienced professionals from Google, Meta, Nord Security, and more.

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Flexible apprenticeship learning

Using your Apprenticeship Levy funds

Levy funds are stored in your Apprenticeship Service account.

Can be used for:

End-Point Assessment (EPA) fees

Accredited apprenticeship qualifications

Can’t be used for:

Apprentice wages

Recruitment, admin, or travel costs

Non-apprenticeship training programmes

How businesses benefit from the Apprenticeship Levy

Upskilling and reskilling

Existing employees

Train employees in data, AI, digital skills, and leadership to improve business performance.

New employees

Equip new hires with the skills needed from day one to meet business needs.

Reduced hiring costs

Existing employees

Avoid expensive recruitment by developing internal talent.

New employees

Fill skill gaps cost-effectively by hiring apprentices at a lower cost.

Productivity and business impact

Existing employees

Employees apply skills in real time, driving efficiency and innovation.

New employees

Apprentices develop practical skills while contributing to the business as they learn.

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Retention and employee loyalty

Existing employees

Provide structured career progression, increasing job satisfaction and retention.

New employees

Attract top talent and offer clear development opportunities for engagement and growth.

Levy coverage

Existing employees

100% of training costs can be covered, maximising your return on investment.

New employees

Levy funding offsets onboarding costs, reducing upfront expenses.

Future workforce planning

Existing employees

Develop a pipeline of internal talent, preparing employees for leadership roles.

New employees

Build a skilled workforce from the ground up, tailored to business needs.

How to calculate your Apprenticeship Levy

Annual pay bill × 0.5% − £15,000 = annual levy payment

  1. Find your total annual pay bill (includes wage, bonuses, commissions, and pension contributions).

  2. Multiply by 0.5% to get your levy amount.

  3. Deduct £15,000 allowance to calculate final contribution.

Calculate your annual levy payment

Annual pay bill

Levy payment

0

FAQ

How can employers access and manage their levy funds?

Employers manage funds through the Apprenticeship Service account (also known as the Digital Apprenticeship Service, or DAS). This online portal allows businesses to track their levy payments, manage apprentices, find approved training providers, and transfer unused funds.

What happens to unused Apprenticeship Levy funds?

Unused funds expire after 24 months and are redirected to government-supported apprenticeship programmes. To maximise the benefit of levy contributions and avoid losing funds, employers should plan ahead.

Can the Apprenticeship Levy be used for existing employees?

Yes, the levy can be used to train both new hires and existing employees. Many companies use levy-funded apprenticeships to upskill their current workforce, ensuring employees develop the most up-to-date skills to meet business needs.

Can employers transfer Apprenticeship Levy funds to other businesses?

Yes, employers can transfer up to 50% of their annual levy funds to smaller businesses or supply chain partners for apprenticeship training. Transfers must be made before the recipient’s apprentices start their programme. Employers can transfer funds through their Apprenticeship Service account.

What funding is available for businesses that don’t pay the levy?

Businesses with an annual pay bill under £3 million do not pay the levy but can still access 95% government-funded apprenticeship training, paying just 5% of training costs.

Ready to transform your team?

Let’s discuss how our apprenticeships can help you achieve your business goals.

Boom Training
Boom Training LtdUnit 1 Azera, Capstan Rd, Southampton SO19 9UR201 Borough High Street, Londonhello@boom-training.com
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