No Levy? No Problem: How SMEs can Benefit from Apprenticeships 

A common misconception with apprenticeships is that you must be in a business that pays into the levy to access apprenticeship programmes. This however, is not the case, and you don’t need to pay the levy to benefit from apprenticeships.  

With 95–100% of training costs funded by the government (or through levy transfers), and strong support from training providers, apprenticeships are one of the most cost-effective ways to build skills, develop talent, and future-proof your business.  

Understanding the apprenticeship levy  

The apprenticeship levy is a government tax that applies to employers with an annual payroll of over £3 million. These employers pay 0.5% of their wage bill into the levy to fund apprenticeship training.  

If your payroll is below that threshold, meaning you don’t pay the levy, you’re still eligible for generous government support to train both new recruits and existing staff. Here’s how it works and what your options are:  

Government co-investment: 95% of training costs covered  

For non-levy-paying employers, the government funds 95% of apprenticeship training and assessment costs, with the employer paying just 5%.  

That means a £5,000 course costs your business only £250, with the rest fully covered by the government. This support applies to apprentices of all ages, at all levels – from entry-level roles to higher and degree apprenticeships.  

 100% funding for non-levy employers hiring young apprentices  

If you are a non-levy paying business, you could receive 100% funding for apprenticeship training if your apprentice is aged 16–21, or 22–24 if they have been in care or have an Education, Health and Care Plan (EHCP). This is often a great way for businesses to train new talent as it helps you invest in your business’ future as well as your employees.   

Levy transfers: getting support from larger employers  

Many large organisations with unspent levy funds are eager to transfer up to 50% of their annual levy pot to smaller businesses. If you’re a non-levy employer, you can receive a levy transfer to cover 100% of your apprenticeship training costs. As a smaller business, this is a helpful way of accessing fully funded apprenticeships and as a larger employer, it is a good way of investing back into your local economy and businesses.  

Support every step of the way  

Managing apprenticeships may sound complex, but training providers like UA92 are on hand to take care of most of the process, from recruitment and onboarding to training delivery and compliance. We can also help you access funding, connect with levy transfer partners, and guide you through the Digital Apprenticeship Service (DAS), the online system for managing apprenticeship funding. For more information on this, please book in a call with our apprenticeship team.  

Find out more about UA92 Apprenticeships on our Apprenticeships page