How can employers that do not pay the apprenticeship levy fund apprenticeships?

Not all employers are liable to pay the apprenticeship levy. The levy is set at 0.5% of each employer's paybill, but there is an annual allowance of £15,000 for each employer to offset against the levy. In effect, employers with a paybill of £3 million or less will not be liable to pay the apprenticeship levy (because 0.5% of £3 million is £15,000). Employers that do not pay the levy can receive government funding towards the costs of apprenticeship training and assessment through co-investment.

The Government will pay 90% of the price agreed with the training provider, up to the maximum allowed by the funding band for the relevant apprenticeship standard or framework. From 1 April 2019, the amount that the Government will pay increases to 95%.

Employers with fewer than 50 employees are not required to pay a contribution to the cost of the apprenticeship where the apprentice is aged 16 to 18 inclusive, or aged 19 to 24 inclusive if they have previously been in care or has a local authority education, health and care plan. The Government will pay 100% of the training and assessment costs in these circumstances.