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The Carval HR Software Blog

Payroll legislation update: Apprenticeship Levy

Posted by Emma Clare

07/03/17 15:33

As presented at the Carval National User Conference on 13 October 2016

The apprenticeship levy was first announced in the Summer Budget 2015 and will come into effect in April 2017.

The Government introduced the levy as part of a drive to train three million new apprentices by 2020, by aiming to replace all taxpayer funding of apprenticeships for companies of all sizes. As presented to Carval's payroll software users at the Carval National User Conference in October 2016, the apprenticeship levy will include the following:


  • 5% of any paybill in excess of £3 million
  • Allowance of £15k to offset against levy payment
  • Less than 2%of UK employers will pay the levy  
  • Digital Apprenticeship Service (DAS) – once employers have paid the levy, they will be able to access funds through the DAS
  • 10% top up to amount of levy credited to DAS account
  • Funds will automatically leave the employer’s digital account on a monthly basis, spread over the lifetime of the apprenticeship.
  • Unused funds expire after 18 months

The apprenticeship levy will affect employers in all sectors:

  • UK wide employers- levy spilt for DAS account will be based on home postcode of employee
  • Learners beginning their apprenticeship before May 2017 will be funded using current methodologies for the entire programme
  • Levy paying employers and non-levy paying employers and levy paying employers with insufficient funds in account
  • Co- investment rate proposed 90/10 split between Government and Employers
  • For levy paying employers with insufficient funds in account
  • Available for non-levy paying employers from 2018
  • Levy paying employers negotiates a price beyond their funding band- the excess must be paid by the employer

The apprenticeship funding system will be made up of 15 funding bands, to replace the existing complex and confusing system. Digital funds and government funding can be used for:

  • Apprenticeship training and assessment
  • Against an approved framework or standard
  • With an approved training provider and assessment organisation
  • Up to the funding band maximum for that apprenticeship

Spending the Apprenticeship Levy

  • Scotland will be the only devolved nation to consult employers on how share funding is used
  • UK nations host different apprenticeship standards and frameworks

Carval payroll software and the Apprenticeship Levy.

Carval's Uniwage payroll software v5.9 provides the required supprot for the Apprenticeship Levy. 

Further reading:



Skills Development Scotland


England- Skills Funding Agency


Wales- Skills Gateway 


Northern Ireland- Skills to Succeed


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Topics: HMRC Payroll News & Updates

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