Understanding Apprenticeship Funding

Apprenticeships are a valuable way for businesses to develop their workforce, helping employees acquire key skills and qualifications while they earn. However, understanding the funding options available can be challenging, especially with the various schemes and rules in place. 

This article will outline the key points that employers need to know about funding Apprenticeships, so you can make informed decisions that benefit both your business and your Apprentice. 

The Apprenticeship Levy 

If your organisation’s annual pay bill exceeds £3 million, you are required to pay the Apprenticeship Levy. The levy is charged at 0.5% of your annual bill, but you receive a £15,000 allowance to offset this. The funds collected via the Levy can only be used for Apprenticeship training and assessment through a registered training provider, like The Sheffield College.  

Can I use levy funds to train existing employees?  

Yes, Apprenticeship funding is not restricted to new hires. You can use it to fund the training and development of your existing workforce, provided the Apprenticeship is relevant to their role and offers additional skills and value.  

What if I’m a non-levy paying business? 

From 1st April 2024, if your organisation doesn’t pay the Apprenticeship Levy, the government will fully fund Apprenticeship training costs, up to the funding band maximum, for Apprentices who meet the following criteria: 

Aged 16 to 21 (or 15 if they turn 16 between the last Friday in June and 31st of August).  

Aged 22 to 24 with an Education, Health and Care (EHC) plan or who have been in the care of their local authority and whose employer has fewer than 50 employees. 

Additional incentives for hiring young Apprentices  

Employers who take on Apprentices aged 16-18 receive additional financial support. Currently, you can benefit from an incentive payment of £1,000 per Apprentice, which can help cover the initial costs of recruitment, training, or additional support needed at the start of the employment. This payment is also available for Apprentices aged 18-24 with an Education, Health and Care (EHC) plan. 

Funding rules and requirements 

There are specific funding rules that employers need to comply with to access government funding for Apprenticeships. These include working with approved training providers, like us! Ensuring the Apprenticeship lasts for at least 12 months and providing a minimum of 6 hours of off-the-job training during the Apprentice’s working hours. 

You can view the most up-to-date rules here. 

How to apply for funding  

To manage and apply for Apprenticeship funding, all employers must register for an account on the Apprenticeship Service. 

For a full breakdown of how to apply, contact our team of experts here. 

Whether you’re a large or a small organisation, Apprenticeships provide a financially accessible route to training. Start your journey today by contacting us!