Government funding and Co-investment
How it works
The Apprenticeship Levy has been designed to improve the quantity and quality of apprenticeships across the country enabling businesses to train and develop staff according to the strategic aims of their business. The funding and support provided by the Government is often misunderstood and underused; the University of Exeter will work with you to help you maximise your Apprenticeship Levy to deliver cost-effective training for either your current staff or new recruits.
The Apprenticeship Levy was introduced by the UK government in April 2017 to fund apprenticeships across the UK.
All employers with a pay bill of over £3 million will automatically pay the 0.5 per cent Apprenticeship Levy to the Government.
Employers with a pay bill of less than £3 million will not pay the Apprenticeship Levy but are still eligible for Government funding to access Higher Level and degree apprenticeships. The Government will fund at least 95% of the training costs, with additional incentives available if certain criteria are met.
The levy can be used to fund a level 6 or level 7 degree apprenticeship with the University of Exeter.
For full and up-to-date information about how businesses take on apprentices, please check the Government's webpages.
If you are a levy-paying business:
- All levy funds are managed through the apprenticeship service and they are held digitally and managed via your online account
- If you are a levy-paying employer your levy must be declared through the PAYE process, apprenticeship funds will then enter your account monthly
- The Government adds 10 per cent to each monthly payment so businesses gain on each contribution
For further information about making your Apprenticeship Levy payments, and how to use them, see the Government's information guide for employers.
Employers who do not pay the apprenticeship levy share the cost of training and assessing their apprentices with the Government. This is called ‘co-investment’. You pay 5 per cent towards the cost of apprenticeship training and the Government will pay the rest (95 per cent) up to the funding band maximum.
If you are a non-levy paying business and employ fewer than 50 people, and you recruit a 16-18 year old or a 19-24 year old with an education health and care plan, you may be able to claim 100 per cent Government funding.
Please check the ESFA funding pages for more information.
Levy funds expire 24 months after they enter your digital account unless you spend them on apprenticeship training.
If you have unused apprenticeship funds you can transfer them to another employer using the apprenticeship service. You can transfer a maximum of 25% of your annual levy funds.
Additional payments are available as extra funding to help with any extra costs of training specific groups of apprentices. The different types of additional payments are the 16 to 18 payment, the eligible 19 to 24 payment, learning support and the care leaver’s bursary which is payable direct to the apprentice.
For further information about additional payments please see the current Apprenticeship funding rules and guidance for employers.
An incentive payment of £3,000 per apprentice is available for employers hiring a new apprentice of any age with both a contract of employment start date between 1 April 2021 and 30 September 2021 inclusive and an apprenticeship practical period start date between 1 April 2021 and 30 November 2021.
The incentive payment is in addition to the £1,000 employers already receive for hiring an apprentice:
- Aged 16 to 18 years old
- Under 25 with an education, health and care plan or who has been in the care of their local authority
Please view more information here about the incentive payments.
You can view your application for incentive payments here.
A new Government service is available to help you hire apprentices who have been made redundant. Under this scheme you can apply for incentive payments as well as benefit from an experienced apprentice who can quickly add value to your business whilst completing their studies.