The Apprenticeship Levy is a Government tax of 0.5% for every employer with a payroll of over £3 million. It is collected by HMRC directly via the PAYE process. There is a £15,000 allowance, similar to the PAYE tax allowance. No employer is exempt. The Levy is collected from employers monthly and is held in a ‘virtual’ account.
It is the employer’s responsibility to declare via PAYE that they are a levy paying organisation. The Levy is accessed through the Digital Apprentice Service. Monthly Levy payments can go up or down according to the employer payroll amount (fluctuations in staffing and seasonal employment), with overpayment rebated at year end.
Non-Levy paying companies (those under the £3 million payroll threshold) can access apprenticeship funding through a Government-funded co-investment model.