Business of Education

Maximising Government Incentives for Apprenticeships: Tips and Strategies

February 28, 2023

Table of Contents

Are you an employer in the UK looking to make use of government incentives for apprenticeships?

Are you curious about how the Apprenticeship Levy works and what strategies can be used to maximise your investment?

Look no further.

We have compiled a range of tips and strategies on leveraging government incentives for apprenticeships, including details on how the levy varies for levy-paying employers and SMEs, as well as transfer opportunities. Read on to find out more about successful apprenticeship programs, resources available, plus some inspiring examples of success stories from those who've already made it work.

What is the Apprenticeship Levy?

The Apprenticeship Levy is a tax on UK employers that was introduced in April 2017. It requires all businesses with an annual wage bill of more than £3 million to pay 0.5% of their total payroll costs into the levy each year. The money collected from the levy is then used to fund apprenticeships across England, Scotland and Wales.

Who Pays the Levy?

Employers who have an annual wage bill of more than £3 million are required to pay the Apprenticeship Levy each year. This includes companies, charities and public sector organisations, as well as any connected or associated companies within a group structure. Smaller businesses with an annual wage bill below this threshold do not need to pay the levy but can still access government funding for apprenticeships if they meet certain criteria.

How Much Does it Cost?

The amount employers need to pay depends on their total payroll costs for that financial year – those with an annual wage bill over £3 million will be required to contribute 0.5% of these costs towards the Apprenticeship Levy each year (up to a maximum payment of £15,000). For example, if your business has a total payroll cost of £4 million per annum you would be liable for paying 0.5% x 4m =£20k into the levy pot annually (but capped at a maximum payment of £15k).

What are the Benefits of Paying the Levy?

By contributing towards the Apprenticeship Levy, employers can benefit from additional funds which can be used towards training new or existing staff members through accredited apprenticeship programmes. This helps them upskill and gain valuable qualifications while working in their role within your organisation. Additionally, by investing in high-quality training opportunities you will help create a motivated workforce who feel valued and supported; improving morale and productivity throughout your business as well as increasing employee retention rates too.

The aim of the Apprenticeship Levy is to encourage businesses to invest in apprenticeships and skills development, but the levy can also be transferred to other employers who are looking to benefit from it. To learn more about transferring apprenticeship funds, read on.

Key Takeaway: The Apprenticeship Levy requires employers with an annual wage bill of more than £3 million to pay 0.5% of their total payroll costs into the levy each year, and offers benefits such as additional funds for training, improved morale and productivity, and increased employee retention rates.

Transferring Apprenticeship Funds

Who Can Transfer Funds?

Apprenticeship funds can be transferred between employers in the same sector, or to another employer in a different sector. The government has set out rules and regulations for transferring apprenticeship funds, which must be followed by all parties involved.

How to Transfer Funds?

Employers who wish to transfer their apprenticeship training funds must first register with the Department for Education (DfE). Once registered, they will receive an access code which allows them to log into the DfE's online portal and submit a request for a transfer of funds. This request must include details about both employers – including contact information and confirmation that each employer is eligible to receive funding – as well as details about the apprentice being funded. Once submitted, it takes up to 10 working days for the DfE to process the request and approve or reject it.

By transferring apprenticeship training funds from one employer to another, businesses are able to make use of existing resources more efficiently while still providing valuable training opportunities for young people entering new careers. It also helps reduce costs associated with recruiting new staff members or retraining existing employees on specific skillsets required by certain industries. Additionally, transferring apprenticeship funding can help create more job opportunities within sectors where there may otherwise be limited options available due to budget constraints or a lack of qualified applicants.

By understanding how to transfer funds, organisations can maximise their use of  apprenticeships and explore strategies such as upskilling existing staff, hiring junior staff into early career roles, or utilising flexible funding options.

Transferring apprenticeship funds between employers can help create more job opportunities and reduce costs associated with recruitment. Find out how to do it with the government's rules and regulations: #apprenticeships #jobsinlearning

Strategies for Maximising Apprenticeships

Employers looking to maximise their apprenticeship programmes should consider upskilling existing staff. This can be done through a variety of methods, such as providing additional training and development opportunities or offering mentorship schemes. By investing in the skills of current employees, employers can ensure that they have a well-rounded workforce with the necessary knowledge and experience to make the most out of an apprenticeship programme.

Hiring junior staff into early career roles is another way for employers to get the most out of their apprenticeships. Apprenticeships provide young people with valuable work experience while also giving them access to industry-specific qualifications which will help them progress in their chosen field. Employers should look for candidates who are motivated and willing to learn new skills, as these individuals are likely to benefit from an apprenticeship more than those who lack enthusiasm or ambition.

Finally, employers should take advantage of the flexible funding options available when setting up an apprenticeship programme. The government offers financial incentives for businesses taking on new apprentices, so it is important that employers research what grants and subsidies they may be eligible for before committing any resources towards hiring someone on an apprentice contract. Additionally, some companies offer tax credits which can reduce costs associated with employing an apprentice even further, making it easier for businesses to invest in talent without breaking the bank.

Maximise your apprenticeship programme by upskilling existing staff, hiring junior staff into early career roles and taking advantage of government incentives. #apprenticeships #investintalent

Examples of Successful Apprenticeships Programs

Apprenticeship programs have been around for centuries, and in recent years they have become increasingly popular as a way to gain skills and experience. Case studies from different sectors can provide insight into the success of apprenticeship programs.

One example is the construction industry, where apprenticeships are used to train new workers in various trades such as carpentry, plumbing, electrical work and more. Apprentices learn on-the-job skills while also receiving classroom instruction that helps them understand theory behind their trade. The result is an experienced workforce that can quickly adapt to changing job demands.

Another sector that has seen success with apprenticeships is healthcare. Hospitals often use apprenticeship programs to train healthcare assistants who help doctors and nurses with patient care tasks such as taking vital signs or administering medications. These individuals receive both classroom instruction and hands-on training at hospitals or clinics so they can be prepared for a variety of roles within the healthcare system upon completion of their program.

Apprenticeship programs have been successful in a variety of industries, ranging from hospitality to finance and beyond. These provide valuable opportunities for those who wish to start a career without prior experience or qualifications necessary for entry level positions. With apprenticeships, individuals can gain on-the-job skills while also receiving classroom instruction that helps them understand the theory behind their trade. This enables them to be prepared for various roles within the industry upon completion of their program.

Apprenticeship programs have seen success in many different sectors, and the resources mentioned in the next section can provide further information on government incentives and other useful information to help you make the most of these opportunities.

Key Takeaway: Apprenticeship programs are a great way to gain skills and experience in various industries, such as construction, healthcare and hospitality. They provide valuable opportunities for those without prior qualifications or experience by combining on-the-job training with classroom instruction. This helps individuals be prepared for roles within their chosen industry upon completion of the program.

Resources on Government Incentives for Apprenticeships

When it comes to finding resources the available government incentives for apprenticeships, there are a number of sources available. Government websites and publications provide detailed information about the rules and regulations related to apprenticeship programs in the UK. Professional associations and networks can also offer advice or support with implementing an apprenticeship program in the workplace.

The UK government provides a wealth of websites, publications and other resources that offer detailed information about apprenticeships. These include GOV.UK – Apprenticeships which gives comprehensive guidance on how to set up an apprenticeship scheme and also the Apprenticeships website, which offers information for all stakeholders involved. You can check out information from our friends at the Association of Employment and Learning Providers or you can reach out to us directly for more information and orientation.

Key Takeaway: The UK government provides a range of resources and incentives to help employers set up apprenticeship programmes, such as GOV.UK – Apprenticeships, the Apprenticeship Levy, Transferring Apprenticeship Funds, Strategies for Maximising Apprenticeships and Funding Incentives for Employers.

FAQs in Relation to Government Incentive for Apprenticeships

What government incentives are available for employers to take on apprentices?

The UK government offers a range of incentives to employers who take on apprentices. These include the Apprenticeship Levy, which is paid by large employers with an annual pay bill over £3 million and can be used to fund apprenticeships; the Apprenticeship Grant for Employers (AGE), which provides funding of up to £1,500 per apprentice; and the Apprenticeship Incentive Payment, which pays employers between £1,000-£2,000 for each new apprentice they hire aged 16-24 or those aged 25+ who have been unemployed for at least 90 days prior to starting their apprenticeship. Additionally, some small businesses may also qualify for additional grants from local authorities or other organisations.

How can businesses access government funding for apprenticeships?

Businesses can access government funding for apprenticeships through the Apprenticeship Levy. This is a UK-wide employer contribution which funds apprenticeships in England, Scotland and Wales. The levy requires employers with an annual pay bill of more than £3 million to invest 0.5% of their total pay bill into the Apprenticeship Levy each month. Employers can then use this money to fund apprenticeship training and assessment for their employees or transfer it to other businesses who are looking to take on new apprentices. Additionally, businesses may be eligible for additional financial support from the government depending on location and type of apprentice they wish to hire.

Are there any tax breaks or other financial benefits associated with taking on an apprentice?

Yes, there are tax breaks and other financial benefits associated with taking on an apprentice. Apprentices aged 16-18 or in the first year of their apprenticeship can be exempt from paying employer National Insurance contributions up to a certain amount. Additionally, employers may be eligible for funding support when recruiting an apprentice, depending on their location and sector. Furthermore, businesses that employ apprentices may also benefit from reduced rates of corporation tax. All of these benefits can help to reduce the cost of taking on an apprentice.

What support is available from the government to help employers recruit and train apprentices?

The UK government provides a range of support to employers looking to recruit and train apprentices. This includes financial incentives such as the Apprenticeship Levy, which is paid by larger employers with an annual pay bill over £3 million, and the Apprenticeship Grant for Employers (AGE), which offers up to £2,000 per apprentice for smaller businesses. Additionally, there are various online resources available from the National Apprenticeship Service that provide guidance on recruitment and training processes. Finally, government-funded organisations such as Skills Development Scotland offer free advice and support services tailored specifically to help employers take on apprenticeships.

How do I apply for a grant or loan from the government to fund my apprenticeship program?

The UK government offers a range of grants and loans to help fund apprenticeship programmes. To apply, you must first register with the Apprenticeship Service and create an account. You will then be able to access the online application form, which includes details about your proposed programme, funding requirements and contact information. Once submitted, your application will be assessed by the relevant government body who will decide whether or not to provide financial support for your project. Grants are typically awarded on a case-by-case basis depending on individual circumstances so it is important to ensure that all required information is provided accurately in order for a successful outcome.


The apprenticeship levy is a great way to get the most out of government incentives for apprenticeships. With careful planning and implementation, employers can use these funds to upskill existing staff or hire junior staff into early careers roles. By taking advantage of transfer opportunities and other strategies, businesses can benefit from successful apprenticeship programs that are tailored to their needs. For more information on how to make the most of government incentives for apprenticeships, be sure to check out our resources.

At Bolt Jobs, we work extensively with the apprenticeships sector and we are passionate about the need to invest in our future by maximising the use of government incentives for apprenticeships. This will help create more job opportunities, provide a pathway into further education, skills and learning while helping young people gain the necessary experience they need to succeed.

If you’re still feeling lost and need some advice, reach out to us. Having worked with the apprenticeship sector for many years, we can signpost you impartially to the best experts out there.

Alex Lockey
Director | Bolt Jobs
Founder Alex Lockey is an expert in further education, learning, and skills sector. He leads cost-effective hiring solutions and is known for successful talent placements. Dynamic and driven, Alex seeks innovative solutions to solve sector hiring challenges.