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In April, the way the Government funds apprenticeships in England is changing and many businesses will find themselves facing new obligations.

However, many business people still find themselves confused as to what effect the new Apprenticeship Levy will have on them.

Put simply, the levy requires all employers operating in the UK with a pay bill of more than £3 million each year, to make an investment in apprenticeships. That means that 98% of employers will pay no levy.

For those that do, the bill will be calculated using a formula based on total employee earnings and, yes, if you are eligible you have to pay!

The apprenticeship levy, to be collected through PAYE, will be set at 0.5% of an employer’s wage bill. However, this will be offset by a £15,000 tax-free allowance.

So, if you are not eligible to pay, should you ignore the change?  Well, no, because all employers who do not pay the levy will be able to access government support for apprenticeships.

This matters because taking on an apprentice allows you to support a young person seeking to develop a career and allows you to develop someone with the skills you need. What’s more, the apprentice earns while they learn, removing a key barrier to advancement.

What’s not to like?

Ian Pratt founded and runs North East funding brokers IAP Consultancy, which can access expert advice through its connections. IAP Consultancy is a well-respected commercial finance brokerage business which helps businesses access the funding they need to grow. You can find out more about IAP Consultancy at

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