Contact Us
Vacancies

The Apprenticeship Levy

Good News for Employers: Enhanced Apprenticeship Funding Support 

From 1st August 2026, levy-paying employers who have exhausted their apprenticeship levy funds can continue to access 100% government-funded training and assessment for eligible apprentices aged 16–24. 

This increased support helps to reduce recruitment and training costs, making it even easier for employers to invest in young talent, develop future skills, and grow their workforce through apprenticeships. 

In addition, the Government has introduced a range of new incentives and support measures throughout 2026 to encourage the recruitment of young people. These initiatives provide valuable financial support for employers looking to build a skilled and sustainable workforce. 

At Colchester Institute, we’re here to help you make the most of these opportunities. We’ve summarised the key funding incentives and support available to employers below.

The Growth and Skills Levy helps employers invest in apprenticeships, workforce development and skills training. If your organisation has an annual pay bill of more than £3 million, you are required to contribute to the levy through PAYE via HMRC. The funds generated can then be used to support approved apprenticeships and eligible training programmes.  

Key Facts: 

  • Employers contribute 0.5% of their annual pay bill towards the levy.  
  • Funds can be used for approved apprenticeships and other eligible training available through the Growth and Skills Levy, including apprenticeship units. 
  • New funds entering employer accounts from 1st August 2026 expire after 12 months if they are not used.  
  • Funding is managed through the Digital Apprenticeship Service.  

How can we help?

Our Employer Engagement Team provides expert support to help businesses maximise the value of their levy funds. 

We can help you: 

  • Identify the right apprenticeship and training programmes 
  • Access available funding 
  • Recruit apprentices 
  • Manage your Digital Apprenticeship Service account 
  • Transfer levy funds where appropriate 
  • Develop training plans aligned to your business objectives 

To speak to an Apprenticeship Advisor, call 01206 712043 (option 2).

How Levy payments are made?

Levy contributions are reported and paid to HMRC through the Pay As You Earn (PAYE) process alongside Income Tax and National Insurance contributions. Payments are calculated and reported monthly as part of your normal payroll activity.

Digital Apprenticeship Service

The Digital Apprenticeship Service is the online platform used to manage apprenticeship funding and Growth and Skills Levy funds.
Through the service, employers can:

  • View available funds
  • Monitor spending and expiry dates
  • Approve apprenticeship training
  • Manage training providers
  • Pay for training and assessment
  • Transfer unused levy funds to eligible employers, where permitted

Find out more on the GOV.UK Digital Apprenticeship Service website.

What can levy funds be used for?

Funds available through the Growth and Skills Levy can be used for:

  • Apprenticeship Units
  • End-point assessment
  • Other eligible training approved under Growth and Skills Levy rules

Levy funding cannot be used for:

  • Salaries and wages
  • Travel expenses
  • Equipment
  • Employee benefits
  • General business costs
Funding bands

Every apprenticeship standard is assigned a government funding band. This determines the maximum amount of funding available for training and assessment.
If training costs exceed the funding band maximum, employers may be required to pay the difference. Funding arrangements will always be agreed before training begins.

Support for young apprentices

Recruiting younger apprentices can help businesses build future talent pipelines while accessing additional government support.
Additional support may be available where the apprentice is:

  • Aged 16 to 18 at the start of their apprenticeship
  • Aged 19 to 24 with an Education, Health and Care Plan (EHCP)
  • Aged 19 to 24 and has previously been in local authority care

Additional funding is provided directly by the government and does not come from an employer’s levy account.

How will I pay the levy?

You will calculate report and pay your levy to HMRC, through the Pay as You Earn (PAYE) process alongside tax and National Insurance Contributions (NICs).

How much will apprenticeship training cost my business?

The cost depends on:

  • Whether your organisation pays the Growth and Skills Levy
  • The apprenticeship funding band
  • The age and circumstances of the apprentice
  • Whether you have available levy funds remaining

Levy-Paying Employers
Levy-paying employers use the funds in their Digital Apprenticeship Service account to pay for apprenticeship training and assessment.
Employers that do not pay the levy
Some employers may be eligible for fully funded apprenticeship training, particularly when recruiting younger apprentices.
Where full funding does not apply, employers typically contribute towards training costs through co-investment arrangements.

What happens if my levy funds run out?

From 1st August 2026, employers can access 100% government-funded training and assessment for eligible apprentices aged 16-24, even after their levy funds have been used up.
For apprentices 25 and over, once available levy funds have been exhausted, apprenticeship training can continue through government co-investment. Employers generally contribute 25% of eligible training and assessment costs, with the government contributing the remaining 75%.
This helps employers continue to invest in workforce development even after levy funds have been fully utilised.
Levy Fund Expiry
Effective planning is important because levy funds do not remain available indefinitely.

  • Funds entering accounts from 1 August 2026 expire after 12 months if unused.
  • Funds credited before that date continue under the previous 24‑month expiry rules.

Regular reviews of your account can help prevent valuable funding from expiring.
Industry Levy Schemes
Some sectors operate separate training levy arrangements, such as the Construction Industry Training Board (CITB).
These schemes do not replace the Growth and Skills Levy. Employers with a pay bill above £3 million may still be required to pay the Growth and Skills Levy in addition to any industry-specific levy obligations.

Need Advice?

Our Employer Engagement Team can help you understand your levy position, identify funding opportunities and support you with workforce development planning that delivers maximum return on your investment.
Call 01206 712043 or email employers@colchester.ac.uk to speak to the Employer Engagement team.

Transforming Lives
Home