26 October 2015
Apprenticeships Levy: What you need to know

What is the Apprenticeship Levy? In layman’s terms, the Apprenticeships Levy is a new government initiative announced in the 2015 Summer Budget. The government proposes to apply the Levy to large employers across all industries. The recent announcement has raised concerns by some employers and asks the question of how big businesses will be hit by the new tax to help fund the training of 3 million apprentices by 2020.

The aim of this is to help develop the UK’s skills base and drive long-term productivity in both the private and public sectors. Funds raised by the levy would provide apprenticeship employers with an electronic voucher that could be used to purchase training from recognised providers. Chancellor George Osborne said that while many companies work hard to ensure their staff gets good training, the country had to “confront the truth… that too many large companies leave the work to others and take a free ride on the system”.

Here are some of your questions answered:


  1. What counts as a ‘large’ employer?

The government has not yet announced this, and it is a key question in the current consultation by the Department for Business, Innovation & Skills (BIS).  It is proposed that the size of employers be calculated on employee earnings.

  1. What will the Levy rate be?

This again is another key question in the BIS consultation. There are assumptions that the rate would be near to the current CITB levy rate.

  1. How will employers pay the new Levy and reclaim the money?

The government proposes that employers will pay the levy payment through their PAYE return to HMRC. It is yet to be determined how the funding raised will be used in Northern Ireland, Scotland and Wales.

  1. How much can I get back from the new Apprenticeships Levy?

The BIS consultation states: ‘Employers that are committed to apprenticeships training will be able to get back more from the Levy than they put in’, through top-ups to their Levy account when they train over and above the amount of their own contribution. 

  1. Can construction employers get an exemption as we already pay the CITB Levy?

The government has indicated that the policy is being proposed on a ‘no exemptions’ basis. However the BIS consultation states: “We need to understand if the new Apprenticeships Levy will affect these sectors differently.”

  1. Will large construction firms need to pay two levies?

The government has said that it will consider how the proposed new Apprenticeships Levy will affect existing Industry Training Boards like CITB.

  1. What are the differences between the CITB levy and the new Apprenticeships Levy?

There are significant differences between the two. Find out more about the differences between the levies.

  1. What happens to smaller construction companies?

Smaller firms will not pay the Apprenticeships Levy. The government will set out in autumn how smaller employers outside the scope of the new Apprenticeships Levy can access apprenticeships funding.


RedBox Recruitment thinks that the levy can have great potential and give employers better ownership of their apprenticeship scheme. According to Government data, the number of employees who go on training courses outside the workplace has fallen from 141,000 a year in 1995 to just 18,000 last year. The new proposal will increase numbers of trained professionals and ensure people are given the right training. We look forward to seeing how this new Levy proceeds.


Please note: the information provided above is the understanding of RedBox Recruitment at the time of writing from the Apprenticeship Levy available today in the media– October 2015.


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