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When do your Apprenticeship Levy funds expire?

By Oliver Simpson on May 31, 2019 1:00:00 PM



This is the eighth article in our 18 part series on the Apprenticeship Levy. The UK Government launched the levy programme back in 2016 in a bid to create 3 million new apprenticeships by the year 2020. It’s a fantastic way for employers to fund apprenticeships and grow their teams, but many firms are still a little unclear on what the levy is, how it works or how it can benefit them. That’s why we’ve put this series of articles together. In recent articles, we’ve talked about who is eligible to contribute, how you can access funds and whether or not the levy can be used to fund in-house training programmes. This time we’re talking about the expiration of levy funds and whether your business needs to be concerned.

How levy funds accumulate

When thinking about the Apprenticeship Levy, businesses tend to fit into one of two camps; those that have an annual payroll of £3 million or more and those that don’t. The former are automatically eligible to contribute 0.5% of their payroll into the levy which will be taken by HMRC via PAYE. The latter don’t have to contribute anything, but can still use the fund if they apply and are willing to put in 10% of any apprenticeship costs.

If you’re one of the businesses that needs to contribute, your funds will automatically accumulate in a digital account. You can use these funds at any time to pay for an approved and registered apprenticeship course, even for an existing employee. However, these funds do come with a ‘use by’ date which some businesses get nervous about.


When levy funds expire

If you’re contributing into the levy you automatically start accumulating funds. If these funds aren’t used within two years, the Government will start recouping a little bit each month to ‘fill up the pot’ for other businesses. While it’s true that this puts a time limit on your funds, this process is designed to ensure that money goes to where it’s needed - i.e. those businesses who are willing to use it to pay for apprenticeships. The best thing your business can do to get a good return on investment for its levy contribution is to spend it! Courses are easy to find and arrange, and you don’t even have to employ new staff or bring in graduates. Anybody in your business looking to step up, earn a promotion, or gain a new qualification is welcome on an apprenticeship course.

Don’t worry though. If you’re sure you won’t have any opportunity to use the funds (or simply don’t want to), there are alternatives to letting your funds expire.


What to do before your funds expire

The Apprenticeship Levy perhaps shouldn’t be called a ‘levy’ at all. It’s more a ring-fenced budget for learning and development; a way to improve your business and help individuals in their careers. If you’re sure you’re not going to be able to use the fund, you can apply to have it redirected to a smaller businesses in your local area. This could be a sister company or a non-competitor that you simply want to help out in order to build stronger local connections. Whether you’re interested in using the funds to pay for apprenticeships or not, just know that you do have options. Even if your funds do expire after two years, your contribution is not going to go to waste and will be reinvested in the apprenticeship economy.

About Ascento

Ascento learning and development specialise in providing workforce development apprenticeship programmes to both apprenticeship levy paying employers and non levy employers. We work closely with employers to identify the key areas for development and design  strategic solutions to tackle these with programmes that are tailored to each individual learner. With two schools of excellence focusing on Management and Digital Marketing we don’t deliver every qualification under the sun, but focus on what we know best and ensure that quality is at the heart of everything we do.


Oliver Simpson

Written by Oliver Simpson