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levy

Changes to funding for Levy and Non-Levy Employers from April 1st 2019

Monday 18 March, 2019

The apprenticeship levy is a compulsory tax on employers introduced by the Government to help fund the development and delivery of apprenticeships. Employers fall into one of two categories: levy payers and non-levy payers. Employers with a paybill of more than £3 million are required to pay the levy - whether they employ an apprentice or not.

“From 1st April 2019 the rate of co-investment will be reduced to 5% for all new apprenticeship starts, with government funding of 95% provided to cover the remaining costs.”

Employers who do not pay the levy, and those who want to invest more in apprenticeship training than they have available in their levy accounts, benefit from government funding to support their commitment to apprenticeships. These employers have to make a financial contribution, a ‘co-investment’, alongside this government funding. All co-investment payments are made directly to the training provider. From 1st April 2019 the rate of co-investment will be reduced to 5% for all new apprenticeship starts, with government funding of 95% provided to cover the remaining costs.

“From 1st April 2019 levy paying employers wishing to support apprenticeships in other businesses, can transfer up to 25% of the annual funding in their apprenticeship service account.”

Levy paying employers can currently transfer 10% of their levy pot to support apprenticeships in other businesses, such as via an Apprenticeship Training Agency like SEAC. From the 1st April the amount that can be transferred is increasing to 25%. The funds transferred must be used to fund training via an Apprenticeship Standard so before setting up a transfer the organisation needs to ensure that the 25% transfer allowance is sufficient to cover the annual cost of an apprenticeship standard.

Hiring an apprentice is a productive and effective way for any business to grow talent and develop a motivated, skilled and qualified workforce.

SEAC are a non levy paying company, we can work with both levy paying and non levy paying organisations. As we employ the apprentice on your behalf we can provide the 'co-investment' route to both types of organisations. Alternatively levy paying organisations can transfer funds to cover the apprenticeship standard as explained above. If you would like to arrange to speak to one of our Account Managers about the Levy and how you can work with SEAC please email us and we will arrange to call you back.