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Written Question
Apprentices: Taxation
Monday 12th February 2024

Asked by: Luke Evans (Conservative - Bosworth)

Question to the Department for Education:

To ask the Secretary of State for Education, whether she has made an estimate of how many and what proportion of businesses have used their apprenticeship service account to transfer unused levy funds to SMEs in each of the last three years.

Answered by Robert Halfon

Transfers are a way for large employers to use their levy funds to support apprenticeships in any other business, including smaller employers, flexi-job apprenticeship agencies and charities to help meet local or sector-specific needs.

Levy-paying employers have been able to transfer 25% of their annual funds since April 2019, when this was increased from 10%, and have been able to use an online service since 2021 to make the process quicker and simpler. Since September 2021, over 500 employers, including ASDA, HomeServe and BT Group, have pledged to transfer over £33 million to support apprenticeships in businesses of all sizes.

The table below shows the number and proportion of levy-paying employers that have used their apprenticeship service accounts to transfer funds to non-levy paying employers in each of the last three financial years. The department does not hold transfer data specific for small and medium enterprises (SMEs), but can confirm that SMEs represent most non-levy employers on the apprenticeship service.

Financial Year

2020/21

2021/22

2022/23

Number of levy paying employers that have transferred funds to non-levy employers.

390

520

580

Proportion of levy paying employers that have transferred funds to non-levy employers.

2.0%

2.5%

2.7%

When reviewing these figures, it is important to note that only unused funds can be transferred. Some employers make full use of their levy funds and so have no funds to transfer.


Written Question
Apprentices: Taxation
Tuesday 6th February 2024

Asked by: Andrew Rosindell (Conservative - Romford)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether he has made an estimate of the interest earned on apprenticeship levy funds in each of the last three years.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

The Treasury is not able to make estimates of whether interest is earned on apprenticeship levy funds. The Apprenticeship Levy is not legally hypothecated, so revenues from the levy are paid into the Consolidated Fund.


Written Question
Apprentices: Taxation
Thursday 1st February 2024

Asked by: Andrew Rosindell (Conservative - Romford)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate his Department has made of the revenue raised from the apprenticeship levy in each of the last three years.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

Monthly receipts data for the Apprenticeship Levy is published by HM Revenue and Customs in their Tax and NIC Receipts publication which can be found online at:

https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk

Please see below for a table of the estimated number of employers paying the Apprenticeship Levy over the last three years:

Tax Year

Number of Employers

2020 to 2021

30,000

2021 to 2022

31,500

2022 to 2023

34,200


Written Question
Apprentices: Taxation
Thursday 1st February 2024

Asked by: Andrew Rosindell (Conservative - Romford)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, how many companies have paid the apprenticeship levy in each of the last three years.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

Monthly receipts data for the Apprenticeship Levy is published by HM Revenue and Customs in their Tax and NIC Receipts publication which can be found online at:

https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk

Please see below for a table of the estimated number of employers paying the Apprenticeship Levy over the last three years:

Tax Year

Number of Employers

2020 to 2021

30,000

2021 to 2022

31,500

2022 to 2023

34,200


Written Question
Apprentices: Taxation
Wednesday 31st January 2024

Asked by: Ian Murray (Labour - Edinburgh South)

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimate he has made of the total revenue raised via the apprenticeship levy from businesses in Scotland for each of the last five years.

Answered by Nigel Huddleston - Financial Secretary (HM Treasury)

Reliable estimates of the revenue raised from businesses in Scotland from the apprenticeship levy are not available as any estimate would need to be based on where employers are registered, and therefore would not necessarily reflect where the liabilities are accrued or where employees are based. Any estimate would not include businesses registered in Wales, Northern Ireland, or England, who have a presence and pay employees in Scotland.


Written Question
Apprentices: Taxation
Tuesday 30th January 2024

Asked by: Priti Patel (Conservative - Witham)

Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what the process is for the reallocation of funds in apprenticeship accounts that have expired; and what the destination of those funds were in the latest period for which data is available.

Answered by Robert Halfon

The funds in levy-paying employers’ apprenticeship service accounts are distinct from, and operate on a different basis to, the department’s apprenticeships budget. The former represents funding for apprenticeships notionally available for use by individual levy-paying employers over a two-year period. The latter represents the total amount of funding available annually to support apprenticeships in England for all employers, including those who do not pay the apprenticeship levy.

The funds available to levy-paying employers through their apprenticeship service accounts are notionally hypothecated based on their levy contributions over a two-year period. These funds do not constitute a ‘physical’ pot of money; they should be considered more as credit that is available for each levy-paying employer to use if they wish.

When a levy-paying employer has an employee on an apprenticeship, their account will show their available funds being debited each month to reflect the cost of this training and assessment. In parallel but entirely separately, the training provider receives an equivalent value monthly payment directly from the department’s apprenticeships budget. These payments do not actually come from levy-paying employers’ accounts.

Since available funds in each levy-paying employer’s account are notionally hypothecated, there are no monies to ‘reallocate’ when unused funds expire after 24 months. The credit is either drawn down, and equivalent payments separately made to training providers from the department’s annual budget, or expires when not used and the department’s annual budget remains the same). The government expires funds after 24 months because otherwise levy-paying employers would accrue unreasonably large balances, with the potential to create financial commitments that the government has not planned to meet.

On average, 98% of the English apprenticeships budget has been spent over the last two financial years. If the department’s apprenticeships budget is not fully spent by the end of the financial year, funds are returned to HM Treasury in line with standard practice set out in the Consolidated Budgeting Guidance.


Written Question
Apprentices: Taxation
Wednesday 24th January 2024

Asked by: Priti Patel (Conservative - Witham)

Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what estimate he has made of the amount of apprenticeship levy that will expire and be returned in each month from December 2023 over the next three years.

Answered by Robert Halfon

The government introduced the apprenticeship levy to incentivise larger businesses to develop and invest in their own apprenticeship programmes whilst ensuring the availability of funding for smaller employers wanting to offer apprenticeships. Through the levy, the government is increasing investment in the apprenticeships system in England to £2.7 billion in the 2024/25 financial year to support employers of all sizes to boost the skills of their workforces.

The funds in apprenticeship service accounts are available for levy-paying employers to draw on for 24 months before they expire on a rolling, month-by-month basis. In December 2023, £104 million expired from levy-paying employers’ apprenticeship service accounts. Demand for apprenticeships is employer-led and the government does not have an estimate of future levy expiry from employers’ apprenticeship service accounts.

The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the apprenticeships budget which funds apprenticeships in England for employers of all sizes. As such, expired funds from employers’ accounts do not represent funding that is lost to the system. Rather, the department directs this funding to supporting apprenticeships in small and medium-sized enterprises, to English and mathematics training for apprentices and to additional payments to employers, training providers and apprentices. Therefore, the department’s spend against its annual apprenticeship budget is a better indicator of the extent to which employers’ levy contributions are being utilised to drive skills development in England. On average, 98% of the English apprenticeships budget has been spent over the last two financial years.


Written Question
Apprentices: Taxation
Wednesday 24th January 2024

Asked by: Priti Patel (Conservative - Witham)

Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Answer of 8 January 2024 to Question 7553 on Apprentices: Taxation, what the total spend from apprenticeship levy accounts was in each year since 2017; and how much and what what proportion of that spend came through the (a) apprenticeship levy and (b) top-up.

Answered by Robert Halfon

The table below shows the total spend from levy-paying employers’ apprenticeship service accounts in each financial year since 2017/2018.

These figures do not cover the total spend on apprenticeships in levy-paying employers, such as additional payments for English and maths support and for taking on apprentices aged 16 to 18.

It is not possible to provide a breakdown of this spend by employers’ levy contributions and the 10% government top-up to those contributions.

Financial Year

2017/18

2018/19

2019/20

2020/21

2021/22

2022/23

Levy spend from employer accounts (£m)

170

639

961

1,041

1,238

1,366


Written Question
Apprentices: Taxation
Monday 8th January 2024

Asked by: Liz Saville Roberts (Plaid Cymru - Dwyfor Meirionnydd)

Question to the Department for Education:

To ask the Secretary of State for Education, whether she has made an assessment of the potential merits of allowing employers in (a) commercial laundries and (b) other sectors to use 25% of their apprenticeship levy funds for non-apprenticeship training.

Answered by Robert Halfon

I refer the right hon. Member to the answer I gave on 10 November 2023 to Question 614.


Written Question
Apprentices: Taxation
Monday 8th January 2024

Asked by: Priti Patel (Conservative - Witham)

Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Answer of 13 December 2023 to Question 3789 on Apprentices: Taxation, what the total expired unused Apprenticeship Levy funds were in each month since May 2019.

Answered by Robert Halfon

The government introduced the apprenticeship levy to incentivise larger businesses to develop and invest in their own apprenticeship programmes whilst ensuring the availability of funding for smaller employers wanting to offer apprenticeships. Through the levy, the government is increasing investment in the apprenticeships system in England to £2.7 billion in the 2024/25 financial year to support employers of all sizes to boost the skills of their workforces. As the apprenticeship levy is UK-wide, income from the levy also supports the Devolved Administrations to invest in their skills programmes.

Employers in England who pay the apprenticeship levy can access funds for apprenticeship training and assessment by registering for an apprenticeship service account. The funds in employers’ accounts reflect the ‘English percentage’ of an employer’s levy contribution and include a 10% top-up from the government. The department does not record industry, sector or organisation type when levy-paying employers register an apprenticeship service account. For this reason, data which shows which sectors were most or least likely to spend their funds cannot be provided. The department does hold information relating to individual employer accounts but it would not be appropriate to disclose this information without consulting with employers.

Employers can use their levy funds for apprenticeships in their own business or transfer up to 25% of their funds to other businesses. Funds that levy payers do not draw on are used to fund apprenticeships in small and medium sized businesses who do not pay the levy. Levy payers are not expected to use all funds available to them, though they are able to do so.

The funds in apprenticeship service accounts are available for levy-paying employers to draw on for 24 months before they expire on a rolling, month-by-month basis. The table attached shows the total funds that expired from levy-paying employers apprenticeship service accounts in each month since May 2019. The decline in levy expiry value for October 2021 was due to a delay transferring levy into employer accounts. As a result, employers were granted an additional month to spend those funds, to ensure that the 24-month window to spend funds was maintained.

The funds available to levy-paying employers through their apprenticeship service accounts are not the same as the apprenticeships budget which funds apprenticeships in England for employers of all sizes. As such, expired funds from employers’ accounts do not represent funding that is lost to the system. Rather, the department directs this funding to supporting apprenticeships in small and medium-sized enterprises (SMEs), to English and mathematics training for apprentices and to additional payments to employers, training providers and apprentices. On average, 98% of the English apprenticeships budget has been spent over the last two financial years.