If your UK business has an annual pay bill above £3 million, you are an apprenticeship levy payer. The levy is 0.5% of your annual pay bill, paid monthly via PAYE. Funds sit in a digital apprenticeship service account and expire 24 months after they enter — so a real cost of unspent levy is real money lost back to the Treasury. This guide covers the mechanics, who is eligible, and what training the levy actually funds.
What the Apprenticeship Levy is
The Apprenticeship Levy was introduced in April 2017 by HMRC. It is a UK-wide tax on employer pay bills, with the receipts funnelled into a fund that pays for accredited apprenticeship training in England. (Scotland, Wales, and Northern Ireland receive a Barnett-formula share that is spent through their own devolved skills systems.) Levy-paying employers in England access their share via a digital apprenticeship service account, which credits funds with a 10% government top-up.
Who pays — and how much
- Annual pay bill > £3 million → 0.5% levy on the portion above £3m (you receive a £15,000 annual allowance offset)
- Annual pay bill < £3 million → not a levy payer, but can still access apprenticeship funding via co-investment (95% government, 5% employer)
- Connected companies (groups) calculate one combined pay bill and share one £15,000 allowance
- The levy is paid monthly through PAYE alongside Income Tax and National Insurance
The 24-month expiry rule
Each monthly deposit into your digital account has an individual 24-month clock. Funds expire on a rolling first-in, first-out basis. A levy payer that funded the account in May 2024 must spend that May 2024 deposit by May 2026 or lose it. This is why levy-paying employers should treat unspent funds as an active cost line, not a passive credit.
What the levy can — and cannot — be spent on
Apprenticeship Levy funds can only be spent on the training and end-point assessment portion of an apprenticeship that is on the approved register — see the Institute for Apprenticeships standards list. They cannot be used for apprentice wages, travel, accommodation, equipment, or non-apprenticeship training. The fund is for accredited, multi-month structured programmes, not short courses.
- Eligible: Level 2 to Level 7 apprenticeship standards delivered by Register of Apprenticeship Training Providers (RoATP) providers
- Eligible: end-point assessment fees
- Not eligible: apprentice salary, statutory training (e.g. mandatory health and safety inductions), CPD short courses, university degrees outside an apprenticeship route
- Transferable: up to 50% of your annual levy can be transferred to other employers
How to find an approved apprenticeship provider
In England, only providers on the Register of Apprenticeship Training Providers (RoATP) can deliver levy-funded apprenticeships. The official directory is the Find apprenticeship training service operated by the Department for Education. FindTraining indexes a subset of these providers — particularly those who also offer commercial (non-levy) training — alongside their delivery methods and locations. Filter by GB on findtraining.com to browse.
Common mistakes to avoid
- Treating the levy as sunk cost — every unspent month is real money that exits the account in 24 months
- Assuming all training is levy-eligible — only on-RoATP apprenticeships qualify
- Forgetting the 5% co-investment if your apprenticeship cost exceeds your account balance
- Ignoring the 50% transfer rule — useful if you cannot use the full allowance internally
How FindTraining helps
FindTraining indexes UK training providers, including those on the Find Apprenticeship Training register. Browse the UK directory at findtraining.com/gb to see categories, delivery methods, and contact options. For levy-funded apprenticeship procurement specifically, always cross-check the official Find apprenticeship training service to confirm RoATP status before contracting.