The Growth and Skills Levy is a UK government initiative designed to fund apprenticeships and encourage businesses to invest in workforce training and development.
Employers with an annual wage bill of more than £3 million are required to pay the levy, which is set at 0.5% of their payroll. There is a £15,000 annual allowance to offset the cost, meaning employers only start paying if their wage bill exceeds £3 million.
The levy is collected monthly through PAYE (Pay As You Earn) by HMRC.
Funds from the levy are held in a digital account that employers can use to pay for apprenticeship training and assessment for both new and existing employees. These funds must be used within 24 months, or they expire and are made available to other employers.
The levy is collected monthly through PAYE (Pay As You Earn) by HMRC. Employers who do not pay the levy can still benefit from the government covering 95% of the apprenticeship training costs, with the employer contributing the remaining 5%.
Levy paying employers can transfer upto 25% of their levy funds to other businesses in their supply chain or industry, supporting broader training initiatives. This scheme is designed to address skills gaps, improve workforce capabilities, and promote continuous learning and development.