Apprenticeship Levy

The Apprenticeship Levy is a UK tax on employers with annual pay bills over £3 million, designed to fund apprenticeship training. Payable at 0.5% of the total pay bill, it includes a £15,000 annual allowance to offset payments, meaning only large employers pay. Funds are accessed via The Apprenticeship Service (TAS) to pay for the apprenticeship training and assessment.  

How it currently works

Currently, each month your apprenticeship service account receives notional funds based on your pay bill in England and the government adds a 10% top-up. When you pay for apprenticeship training, the oldest funds in your account are used first. If you do not use the funds, they expire after 24 months.

What will change from 1 August 2026

The way funds enter your account will change, meaning that:

• you’ll continue to receive levy funds each month based on your pay bill in England
• the 10% government top-up will stop
• the oldest funds in your account will continue to be used first
• new funds entering your account will expire after 12 months if you do not use them

Existing funds will remain, and:

• funds that entered your account on or before 31 July 2026 will continue to expire after 24 months
• the oldest funds will still be used first when paying for training

If you do not use all your levy each year, your apprenticeship programme will continue as normal.

You may see the balance in your account reduce over time. This will not affect your ability to fund apprenticeships or other Growth and Skills Levy products.

If you use all your levy funds

If your levy funds run out, you pay part of the remaining training costs. This is known as co-investment.

The co-investment rate will change for apprenticeships and apprenticeship unit starts from 1 August 2026.

Co-investment rates

When your levy funds run out, you’ll pay:

• 5% for apprenticeship starts up to and including 31 July 2026, with the government paying 95%
• 25% for apprenticeship starts from 1 August 2026, with the government paying 75%

The example below shows the co-investment rates if you have an apprentice on a Post Production Technical Operator Level 4 apprenticeship with a £9,000 funding band and you have exhausted your levy funds.

Up to 31 July 2026:

• your yearly contribution will be £450 (5%)
• the government contribution will be £8,550 (95%)

From 1 August 2026:

• your yearly contribution will be £2,250 (25%)
• the government contribution will be £6,750 (75%)

Need advice? Please contact call our team on 01482 390888 or the main switchboard on 0345 120 0044 and select option “2”.  Alternatively, you can contact us via email at [email protected].