The apprenticeship levy window is being reduced. The time to act is now!
For years, apprenticeship levy funds have typically remained available for around 24 months, giving employers time to plan training and develop workforce skills strategically. However, that landscape is now changing. Reforms linked to the evolving Growth and Skills Levy suggest the expiry window will be reduced to just 12 months, meaning employers may soon have far less time to use funds before they expire. There is a growing emphasis on ensuring levy pots are used to actively invest in the workforce, rather than letting funds sit unused.
As a leading provider of apprenticeships, Learning Curve Group can help you use your balance before it's too late: speak to our expert team today!
Why is the apprenticeship levy changing?
The aim is to move skills funding into the workforce faster, reduce unused balances and prioritise areas where skills shortages are greatest, particularly younger entrants and key sectors. Employers are increasingly being encouraged to plan apprenticeships as a continuous investment rather than an occasional spend.
What are the key changes to the levy?
- Levy funds will expire after 12 months instead of 24
- Greater focus on priority skills and early-career apprenticeships
- Potentially higher employer costs once levy funds are used
What does this mean for employers?
Shorter timelines mean less flexibility. Planning training earlier, monitoring levy balances more closely and maintaining a steady pipeline of apprenticeships will help reduce the risk of losing valuable funding. Many organisations are already working with Learning Curve Group and moving towards more proactive, year-round workforce development strategies.
How do I use my apprenticeship levy?
Your levy can strengthen skills, support recruitment and build future capability, but only if it’s used in time. Reviewing your balance now and planning ahead will help protect your investment and maximise its impact. You can also support your local community and smaller businesses by gifting any remaining funds.
Contact us
Whether you’re diving into apprenticeships for the first time or seeking fresh opportunities, our team is here to help and support you. Connect with us to discover how Learning Curve Group programmes can release potential, empowering both your team and your business to flourish and thrive in the future.
Levy Transfers
Levy-paying organisations can transfer levy funds to other organisations to help fund apprenticeships. They can transfer up to 25% of their levy pot per year. This can have an extensive positive impact on smaller organisations that can't afford the cost of apprenticeship training. We've also seen many instances of levy-paying organisations transferring their funds to businesses in their supply chain to allow them to make use of apprenticeship training within their businesses. This has great a knock-on effect on the service they go on to provide to the transferring business.
Incentives and Grants
As part of the government's commitment to apprenticeships, they often release incentives and grants for employers taking on apprentices in their business. Of course, it's important to ensure an apprentice is the right fit for your organisation rather than be drawn in by the incentive but they're a great additional support for responsible employers. Find out more about the apprenticeship grants available here.
Apprenticeship levy FAQs
The apprenticeship levy was implemented on 6th April 2017 to encourage employers to use apprenticeships to close the skills gaps in their businesses. Employers with a payroll threshold exceeding £3 million began their monthly levy payments from that specific date.
There are some who believe the apprenticeship levy should be more of a skills levy with less strict rules on what it can be spent on but, for now, it remains specifically for apprenticeships.
Every eligible employer is required to make monthly payments of the apprenticeship levy, which amounts to 0.5% of their payroll. The payment is collected automatically by HMRC through the employer's PAYE system at the end of each month. You can access your payments in your online Apprenticeship Service Account.
Employers with a wage bill over £3m pay 0.5% of that amount into their own levy account which they can utilise for apprenticeships in their own business.
One thing to keep in mind is that the apprenticeship levy is applied to businesses based in England. So, if you have employees who work within the devolved nations, Scotland, Wales, and Northern Ireland, they will only qualify for apprenticeship training through the levy if they spend at least 50% of their working time in England.
Businesses that don't pay into the levy can also access levy funds through a levy transfer.
In essence, a levy-paying employer can opt to transfer a portion of their levy funds to another employer, enabling the recipient to use the transferred funds to train their own apprentices.
The transfer process is from one specific employer to another specific employer for a specific apprenticeship programme for a specific number of apprentices but we can help you with all the complicated bits. Levy-paying businesses can transfer a maximum of 25% of their annual levy fund each year.
This can have an extensive positive impact on smaller organisations that can't afford the cost of apprenticeship training. We've also seen many instances of levy-paying organisations transferring their funds to businesses in their supply chain to allow them to make use of apprenticeship training within their businesses. This has great a knock-on effect on the service they go on to provide to the transferring business.
We're afraid not. The funds in your apprenticeship levy pot can only be used for apprenticeship training programmes or the End-point Assessment. They cannot be used for wages or non-apprenticeship training programmes or things.
However, there aren't any rules associated with the grants and incentives the government offers employers for taking on apprentices so you would be able to contribute that extra income towards things like the apprentice's wages.
Levy payments are automatically taken each month through your PAYE and added to your apprenticeship service levy account. They are then available for you to use on apprenticeship training for the next 24 months. After 24 months, they will expire and revert to central government budgets. This policy is intended to encourage consistent investment in high-quality apprenticeship training. When making payments for apprenticeship training, the government will prioritise the utilisation of the oldest funds in your account first, reducing the risk of fund expiry.
So, for example, funds paid into your account in April will expire the following April if they haven't been used.