The Apprenticeship Levy – How to reclaim it (and more!) for your training budget


From discussions I have had with employers, it is evident that there are still a lot to understand about the new apprenticeship levy and standards, as well as many misunderstandings and myths to dispel.  Let’s dispel a few of them here:

Myth Number 1: “I don’t have any apprentices. The levy does not apply to me”
The apprenticeship levy is a tax and there is no avoiding it! Every UK company will be liable to the apprenticeship levy when it comes in on the 6th of April, if their overall wage bill exceeds £3m. If you haven’t already, here’s how to calculate the levy impact on your company:

Apprenticeship levy = 0.5% of the UK payroll (subject to Class 1 secondary NICS) exceeding £3m.

This would include: salaries, bonuses, commissions, pension contributions; but excludes Benefits in Kind.

For example, if your company’s wage bill is £20m, then the levy would be 0.5% x £20m less £15,000 = £85,000.

There is a geographical mis-match to be aware of. Although the levy payment is based on employees in the UK, the levy can only be reclaimed on apprentices whose place of work is in England.

Myth Number 2: “Ok, I know it’s a tax but there’s nothing I can do about it. We will take the hit”
Here’s the good news. You can claim it all back and more. Anything you put into the levy pot can be reclaimed back, with a 10% government top up. There are also additional monetary incentives for smaller firms who have a wage bill lower than £3m. There is a catch. It has to be spent on the training of apprentices. This leads to the next Apprenticeship myth:

Myth Number 3: “I don’t recruit apprentices, so I cannot reclaim the levy”
Under the new definition, you may already be recruiting employees who could be eligible for apprenticeship funding, you just don’t know it yet. The definition of an “apprentice” has changed. Many still have the misguided perception of the apprentice being a school leaver with no qualifications, potentially difficult to manage and taking up a lot of your time. The following could all be deemed “apprentices” in the new levy world:

  • There is no age limit. An “apprentice” could well be an experienced financial services employee, recruited for a senior role.
  • Existing employees could be deemed to be employees, if they move in to a new role. It all depends on whether the role itself maps to an apprenticeship trailblazer standard (of which, there are many and the number is growing).
  • Graduates can be deemed to be “apprentices” in the new levy world. The key is whether they are learning new skills. For instance, graduates with non-financial related degrees would most likely be eligible for an “apprenticeship”. In addition to this, a degree level financial services apprentice standard is being developed. Within this standard, there is the option to complete a professional qualification (such as CWM or CFA) instead of a degree.

The cost of the levy should not overshadow the fact that this is a fantastic opportunity to attract new and emerging talent into the financial services industry.

How would you start to implement an Apprenticeship training programme?
There are some initial simple steps that can be taken:

  1. Quantify the total levy impact on your company (0.5% of the wage bill minus £15,000). This will be how much you could potentially put towards your training budget, plus an additional 10% Government top up.
  2. Look at the existing roles that you have and see which fit to an existing apprenticeship standard. Existing standards include roles in investment management, operations, retail and investment banking, IT etc. A full list can be found under:
  3. Determine how much funding you can claim per apprentice. This will depend on the funding level set by the Skills Funding Agency. For example, the Level 3 investment operations technician role is eligible for £9,000 per apprentice of funding from the levy pot, plus an additional 10% top up. There is also an additional £1,000 per apprentice if aged between 16 – 18.
  4. Consider which professional qualification(s) would be most appropriate for the apprentice role. The apprenticeship standards outline the relevant qualifications to choose from. For example, the Level 3 investment operations technician incorporates the CISI Investment Operations Certificate.
  5. Seek guidance and advice from your peers that are already running apprenticeship programmes, as well as from apprenticeship training providers.

The Government has set a target to have 3 million apprentices in employment by 2020. The apprentice levy is certainly “stick” but there is also the “carrot” of being able to reclaim the levy (and some) to spend on training.  This could be one of those rare “win win” situations. The cost of the levy should not overshadow the fact that this is a fantastic opportunity to attract new and emerging talent into the financial services industry.


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Part of the Fitch Group, Fitch Learning partner with clients to elevate knowledge and skills and enhance conduct. With centers in London, New York, Singapore, Dubai and Hong Kong; we are committed to questioning and understanding client needs across the globe and on the ground locally. Our people advise and build learning solutions to accelerate the achievements of the individual and the company, across the entire employee lifecycle.

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