How Does the Apprenticeship Levy Work?
The Levy is co-funded by any UK employer, in any sector, with a pay bill of £3 million of more, and the government. Those eligible employers pay 0.5% of their pay bill, which is paid through PAYE. However, employers will have a £15,000 allowance to offset their levy payment. This is equivalent to 0.5% of £3 million, so if you are eligible, you are technically only paying the levy on the pay bill amount above £3 million.
For every pound added to the fund, the government will add an extra 10p to spend on apprenticeships. That means that if you have a pay bill of £4 million, you will have to pay £5,000 into the Apprenticeship Levy but will have £5,500 in your account to spend on apprenticeships.