The £15,000 apprenticeship levy allowance effectively results in businesses with an annual wages bill of less than £3 million being outside the scope of the apprenticeship levy charge.

With this in mind, for many general practices, the apprenticeship levy may seem less of an issue for them and their client base. The closest most practices come to seeing the apprenticeship levy in practice is likely to be as a result of a third party agency recharging the levy to one of their public sector personal service company clients, as a result of the new public sector IR35 rules.

You’d be forgiven for not losing too much sleep when it came into effect from 6 April 2017. However, it’s not the levy itself but the new co-investment for funding apprentice training that practitioners need to be thinking about and discussing with their small and medium business clients.

From May 2017, businesses and charities that do not have to pay the apprenticeship levy can seek assistance from the Government to fund apprenticeships they offer employees under ‘co-investment’. Co-investment allows the employer to access funding from the Government to pay for 90% of the training costs, leaving the employer to fund just 10% of the training cost.

There is a wide variety of industries and training programs that the co-investment fund can be used in conjunction with. Given the spiralling costs of university education, apprenticeships are a more desirable alternative for potential employees than ever before, and with co-investment the incentive is now there for the employer to offer them.

When you consider just how expensive training can be for employers, particularly small employers, to be able to put employees through a professional qualification at only 10% of the cost makes co-investment something you really need to be raising with your clients, and indeed, thinking about for your own practice.

To put this into context, the funding band for an Association of Taxation Technician (ATT) apprentice is a maximum cost of £9,000, meaning an employer could now offer an employee the opportunity to study their ATT qualification costing them no more than £900.

Not only does this represent a significant financial saving to clients, but it should also help to increase staff retention as staying with their employer allows them to study towards a professional qualification.

Should you have any further questions on the apprenticeship levy and co-investment, please contact myself at or any of our employment tax team.


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