Using your apprenticeship levy
As an employer with a pay bill of more than £3 million, you’re required to pay the apprenticeship levy. You can manage funds using the apprenticeship service and spend it on training and assessing your apprentices.
The government will apply a 10% top up to the funds you have in your account.
If you don’t have enough funds, you just pay 5% of the outstanding balance and the government will pay the rest. This is up to the funding band maximum allocated to each specific apprenticeship.
For apprentices that started before 1 April 2019, you need to contribute 10%.
If you exceed the funding band maximum, you’ll need to pay all the additional costs.
If you don’t already have an account, find out how to set up an apprenticeship service account as an employer.
Incentive payments for hiring a new apprentice
To help businesses offer new apprenticeships, employers will be able to claim an incentive payment for hiring a new apprentice between 1 August 2020 and 31 March 2021.
For every apprentice that is a new employee to your business, you will get up to £2,000 if they are aged 16 to 24 and up to £1,500 if they are 25 or over.
The incentive payment for hiring a new apprentice is designed to support employers to find the skills they need to help recover from the economic impact of COVID-19 whilst creating new jobs.
Employers can also receive an additional payment of £1,000 if the apprentice starts the apprenticeship aged:
16 to 18
19 to 24 years old and has an education, health and care plan provided by their local authority or has been in the care of their local authority
Hire an apprentice who has been made redundant
You can also use a new government service to help you hire apprentices who have been made redundant.
Many of these apprentices may already have the skills and knowledge you need. Hiring a new apprentice in this way could mean you have a work-ready apprentice who can quickly add value to your business, shortening the time you’ll see a return on your investment.
It also means you are supporting an apprentice to complete their training and achieve their apprenticeship.
If you hire an apprentice that has been made redundant, you can apply for incentive payments for hiring a new apprentice.
Paying your apprentice
You’re responsible for paying your apprentice for their normal working hours and any training they do as part of the apprenticeship.
You must pay them at least the National Minimum Wage rate depending on their age and the year of apprenticeship training they’re in.
The rates from April 2020 are:
|Apprentice||Under 19||19 to 20||21 to 24||25 and over|
|In 1st year||£4.15||£4.15||£4.15||£4.15|
|Have completed 1st year||£4.15||£6.45||£8.20||£8.72|
Transfer funds to another employer
If you have unused apprenticeship funds, you can transfer them to another employer using the apprenticeship service. This will support them to pay for apprenticeship training and assessment.
You can find employers who want to receive a transfer by:
working with employers in your supply chain
getting in touch with employers in your industry
contacting an Apprenticeship Training Agency (ATA)
working with regional partners
You can transfer a maximum of 25% of your levy funds.