Apprenticeship Levy

The Apprenticeship Levy is a UK tax on employers with annual pay bills over £3 million, designed to fund apprenticeship training. Payable at 0.5% of the total annual pay bill, funds are accessed via The Apprenticeship Service (TAS) to pay for apprenticeship training and assessment.  

How the Apprenticeship Levy Worked before August 2026

Prior to 1^st August 2026, each month your apprenticeship service account received notional funds based on your pay bill in England and the government added a 10% top-up. When you pay for apprenticeship training, the oldest funds in your account are used first. If you didn’t use the funds, they expired after 24 months.

What will change from 1 August 2026

The way funds enter your account will change, meaning that:

• you’ll continue to receive levy funds each month based on your pay bill in England
• the 10% government top-up will stop
• the oldest funds in your account will continue to be used first
• new funds entering your account will expire after 12 months if you do not use them

Existing funds will remain, and:

• funds that entered your account on or before 31 July 2026 will continue to expire after 24 months
• the oldest funds will still be used first when paying for training

If you do not use all your levy each year, your apprenticeship programme will continue as normal.

You may see the balance in your account reduce over time. This will not affect your ability to fund apprenticeships or other Growth and Skills Levy products.

If you use all your levy funds

If your levy funds run out, you pay part of the remaining training costs. This is known as co-investment.

The co-investment rate will change for apprenticeships and apprenticeship unit starts from 1 August 2026.

Co-investment rates

When your levy funds run out, you’ll pay:

• 25% for apprenticeship starts from 1 August 2026, with the government paying the remaining 75%

The example below shows the co-investment rates if you have an apprentice on a Level 3 Business Administrator apprenticeship with a £5,000 funding band and you have exhausted your levy funds.

From 1 August 2026:

• your total contribution will be £1,250 (25%)
• the government contribution will be £3,750 (75%)

Need advice? Please contact our Business Engagement team on 01472 311222 and select option “5”. Alternatively, you can contact us via email at myapprenticeship@grimsby.ac.uk.