What happens if the wage bill is under £3 million?

Given the salary threshold of £3 million, not all schools will pay the apprenticeship levy. Settings which do not pay the levy can still take advantage of apprenticeship training, but will pay 5% of the training and assessment costs – the remainder of the cost is paid by the government. If your school is in this situation, please see the section below about Levy Transfer, as you may be able to use another organisation’s apprenticeship levy to fund programmes for your staff.

What about the devolved nations?

Legislation surrounding apprenticeships exists, but is different in each of the devolved nations. The employer contribution to the Apprenticeship Levy is based on the wage bill of staff based in England, and apprentices studying an apprenticeship that is funded by the levy must spend 50% of their time working in England.

What funding is available and how do I access my school’s apprenticeship levy?

Schools, nurseries and colleges in England can access the levy to fund apprenticeship training programmes ranging from Level 2 up to Level 7. Apprenticeships are open to anyone aged 16 and above, there is no upper age limit.

Claiming the levy depends upon the type of setting you are in.

If you think that you are paying the apprenticeship levy, you will need to establish:

• Which organisation / individual controls the funds
• How much funding your school will have access to and the steps involved in accessing the funding
• Speak to your bursar, business manager or finance team to find out more

Local Authority schools benefit from the collective contribution into the Local Authority’s large levy pot, known as a shared levy pot. Schools should be able to access this funding even if their school payroll is below the £3 million levy threshold.

Local Authority schools can request funding from their council’s apprenticeship levy pot to support eligible apprenticeship training, by contacting the Local Authority’s Apprenticeship Team.

(Note if your school is in a pooled PAYE system things may be slightly more complex but this is where apprenticeship advisors at Educational and Sporting Futures can help).

Multi-academy Trusts often have a wage bill of over £3m and so will have a ‘levy pot’. Contact your MAT’s central finance or HR team as the next step.

Voluntary Controlled schools should also approach their Local Authority as they are the employer.

Voluntary-aided and Foundation schools, if non-levy paying, can access 95% of the cost through government apprenticeship funding. Further support may be accessed via the Local Authority or through levy transfer.

How can schools spend their apprenticeship levy?

Teaching assistants; the new standard offers clear routes for career progression, enabling your Teaching Assistants to further their careers and take on more responsibility within a school at both Level 3 and Level 5.

SENCOs; the Level 7 advanced SEND Leader offers experienced SENCOs the ability to gain the skills to develop and execute a strategic plan for SEND, develop their vision for inclusion and build a high-performing SEND team.

Senior Leaders; this leadership programme offers a unique opportunity to earn two valuable qualifications simultaneously. Participants will achieve both a National Professional Qualification (NPQ) and an apprenticeship certification. By combining these two pathways, you’ll gain a well-rounded skillset that blends specialised educational leadership with adaptable management practices.

PE specialists: Equip learners with the knowledge, skills, and behaviours to support the teacher and enhance pupils’ learning in Physical Education or become qualified sports coaches.

Early years practitioners; equip learners with the knowledge, skills, and behaviours to work in an Early Years setting and other job roles including a nursery nurse and childminder.

How can schools benefit from levy transfer?

Large organisations can support employers through what’s known as levy transfer.

Many large employers do not use all of their levy funds, resulting in unused balances.
If unused funds remain in an employer’s account for 24 months, they expire and are returned to the government.

To prevent funds from going to waste larger organisations can support other organisations, by making up to 50% of their annual levy funds available to eligible employers who need financial assistance with apprenticeships.

Please note: The transferred funds must cover the full cost of the apprenticeship training and assessment costs for the receiving employer’s apprentice(s), not just the 5% they would pay without levy transfer. For example, the funding band for a Level 3 Teaching Assistant apprenticeship is £7,000. The levy transfer would need to cover the full £7,000 fee, not just £350 (5%).

How does levy transfer work?

If you think that you are paying the apprenticeship levy, you will need to establish:

• You’ll need to have an apprenticeship service account – You’ll need a GOV.UK One Login to set up or access an account. If you do not have an apprenticeship service account you can read the guidance on setting one up.
• Search for a levy transfer partner here. When seeking applicable funding, there may be stipulations such as the geography in which the apprentice is located, the sector they work in, the level of apprenticeship and type of role.
• Once you’ve located a transfer partner, you’ll need to log into your apprenticeship service account in order to apply for the transfer of funds.
• Your application is shared directly with the levy transfer partner. They will review and confirm if they have accepted your application. Levy partners will commit to funding the full duration of the apprenticeship and you will receive the funds into your apprenticeship service account on a monthly basis.
• If your application is rejected you can apply for another transfer

If seeking to use levy transfer, we would encourage you to start this process as early as possible, as funding must have been agreed prior to the start of the apprenticeship. The Educational and Sporting Futures Team is available to help you with the levy transfer process, but you can also read about the whole process here.

Apprenticeship levy FAQs

Can I use my apprenticeship levy to train more than one apprentice or upskill more than one current member of staff in a year?

Yes. There is no limit on the number of apprentices that can be trained or the number of staff that can be upskilled as long as you have accrued sufficient funds in your levy.

What is the timeline for using my Apprenticeship Levy funds?

Levy funds are available for two years from the date they enter your digital account. If funds are not used within this 24-month period, they expire and are returned to the government.

This expiration policy follows a rolling basis, meaning funds from each month’s contributions will expire 24 months later if unused.

What does my annual wage bill include?

Your annual wage bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions such as wages, bonuses and commissions.

Your pay bill must include payments to:

• All employees earning below the  lower earnings limit and the secondary threshold
• Employees under the age of 21
• Apprentices under the age of 25

What do I do if I’m using a modified PAYE scheme?

If you run a modified PAYE scheme you need to account for National Insurance contributions as usual. Use a best estimate of all earnings that are subject to Class 1 secondary National Insurance contributions to check if you need to pay the Apprenticeship Levy. You need to submit an Employment Payment Summary each month using these estimated figures.

At the end of the tax year, you also need to:

• check your estimated pay bill against the actual figures for the tax year
• submit an extra Employment Payment Summary to correct any difference and pay any Apprenticeship Levy owed