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What is the Apprenticeship Levy?

Recently introduced by the government, the Apprenticeship Levy is a funding system which aims to create 3 million new apprenticeships – individuals accessing approved professional development courses and qualifications - by 2020.

Levy-paying and non-levy paying employers can both access the funding.

Employers with an annual payroll of more than £3 million pay 0.5% of their payroll into the Apprenticeship Levy. The government adds 10% to each monthly levy payment. The levy payment is held in a digital account, which is set up at the apprenticeship service. Each individual’s training costs are deducted from the account and paid to the provider monthly.

The system is different for employers who have a paybill of less than £3 million. any training and assessing costs are shared with the government, with employers paying 10% and the former covering the remaining 90%. These employers agree a payment schedule with the provider.

If a levy-paying employer runs out of funds in their levy account, they can trigger the non-levy route.

Employers can choose to spend their apprenticeship levy funding as they wish, including providing opportunities for current and aspiring leaders to study an MSc or MBA. These degree apprenticeships ensure a rigorous standard of professional development for both managers and leaders.

For instance, at Alliance Manchester Business School, our MSc Management Practice can be accessed using apprenticeship levy funding. This Masters course offers employers a cost-effective way to develop leaders, helping you to build a successful and sustainable business.