The Apprenticeship Levy Explained
The Apprenticeship Levy Explained: NowSkills Digital Apprenticeships
The Apprenticeship Levy is a government-mandated charge on UK employers whose annual pay bill exceeds £3 million. Introduced in 2017, it requires organisations to contribute 0.5% of their total employee earnings into a digital account. Levy funds can only be used to cover apprenticeship training and assessment, making it a powerful tool to develop in-house digital talent.
Who Pays the Apprenticeship Levy?
– Employers with a pay bill over £3 million per year
– Calculated monthly through PAYE submissions
– Paid in at 0.5% of total employee earnings above the threshold
– Funds expire after 24 months if not spent
Because the levy is effectively “use-it-or-lose-it,” NowSkills guides employers to plan digital apprenticeship programmes early, ensuring every pound contributes to upskilling your team.
How Levy Funds Work
Once paid, levy contributions sit in your apprenticeship service account and can be spent on:
– Training fees for approved digital apprenticeship standards
– End-point assessment costs
– Transfer to other employers (up to 25% of levy funds)
NowSkills handles submissions, compliance checks, funding bands – eliminating administrative burden.
Why NowSkills for Digital Apprenticeships?
– Bespoke training plans that align with your business objectives
– Regular funding health checks to prevent expiry of levy funds
– Dedicated compliance support to satisfy ESFA and Ofsted requirements
– Detailed ROI reporting on digital skill improvements and productivity gains
Whether you need software developers, data analysts, or AI specialists, our digital apprenticeship expertise turns levy payments into measurable business outcomes.
Steps to Invest Your Levy in Digital Skills
1. Register with the Apprenticeship Service and access your levy account.
2. Partner with NowSkills to select the right digital apprenticeship standard.
3. Agree a training plan, delivery schedule, and funding breakdown.
4. Enrol apprentices, track off-the-job hours, and submit training claims.
5. Review impact reports and plan your next cohort.
Key Benefits
– 100% of levy funds can offset approved training costs
– Accelerated digital transformation through on-the-job learning
– Enhanced employer brand by investing in workforce development
– Reduced recruitment costs by upskilling existing staff
FAQs: The Apprenticeship Levy Explained
Can I transfer unused levy funds?
Yes, you can transfer up to 25% of your annual funds to other organisations, such as supply-chain partners.
What happens to unspent funds?
Unused levy contributions expire after 24 months. NowSkills helps you budget and forecast to avoid waste.
How do I start?
Contact NowSkills today for a free consultation on how to leverage your levy for digital apprenticeships.
By understanding “The Apprenticeship Levy Explained” and partnering with NowSkills, you turn a regulatory requirement into a strategic investment in your company’s digital future.
Why Levy Employers Choose Apprenticeships with NowSkills
Apprenticeships help Levy employers:
- Maximise their Levy investment
- Build a sustainable talent pipeline
- Upskill staff in critical areas like AI, digital, and leadership
- Improve retention and engagement
- Deliver better public services and commercial outcomes
With flexible training options, strategic impact, and no recruitment fees, NowSkills apprenticeships are one of the most cost-effective ways to invest in your workforce.
Ready to Make Your Levy Work Harder?
Our Employer Partnerships Team at NowSkills is here to help you unlock the full value of your Levy. Whether you’re in the private sector or delivering public services, we’ll guide you every step of the way.
Contact our Employer Partnerships Team to build your apprenticeship strategy today.