Major reforms announced to Apprenticeship Levy

The apprenticeship levy is a tax on employers which can be used to fund apprenticeship training.  The purpose of the levy is to fund an increase in the number and quality of apprenticeships. The Government has introduced significant reforms to the Apprenticeship Levy system, marking the largest overhaul since its launch in 2017. The aim to boost apprenticeship uptake, support early‑career training, and align skills development with national economic priorities.

A central element of the reforms is the transition from the current Apprenticeship Levy to a new Growth and Skills Levy, designed to offer employers greater flexibility in how funds can be used for training.

SMEs will now receive 100% government funding for apprentices under 25, removing the previous 5% co‑investment requirement.

From April 2026 levy funds will begin expiring after 12 months instead of the current 24. Employers who exhaust their levy balance will have a higher co‑investment rate of 25%, up from 5%. In addition, the Government will remove the longstanding 10% levy top‑up, meaning employers will only have access to the value of their own contributions.

For further information please see our factsheet on this topic.

Please contact Alan Davies on 023 8046 1246 or email Alan Davies if you have any questions.