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Factsheet: The Apprenticeship Levy: Key points

This briefing gives key points businesses need to consider on the apprenticeship levy announced in the Chancellor's 2015 Autumn Statement, including calculating it, plus examples of best practice.
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Key findings

  • The levy will come into effect in April 2017.

  • The levy is set at a fixed rate of 0.5% of an employers total wage bill, but with an allowance of £15,000 per business offset against their levy payment.

  • An estimated 2% of businesses in the UK will pay the levy.

 

In June 2015, the government announced that it would create three million additional Apprenticeships by 2020, and that the term ‘apprenticeship’ would gain a set legal definition to protect training standards and quality. 

On 25 November 2015, the Chancellor announced in the Spending Review and Autumn Statement that the government will be introducing an ‘apprenticeship levy’ on larger employers in April 2017 to contribute to funding the policy.

This is expected to generate £3 billion by 2019 – 2020, which will cover half the cost of creating the three million apprenticeships. Apprenticeship spending has been ring-fenced as a high priority.

The levy will apply across the UK and spending on apprenticeships in England will be £2.5 billion, with Scotland, Wales and Northern Ireland also receiving a share of the levy.