The Growth & Skills Levy: what levy-paying employers need to know for April

If you pay the Apprenticeship Levy, there are changes coming that are worth paying attention to.

From April 2026, the Growth and Skills Levy is expected to replace the current Apprenticeship Levy. Not everything has been finalised yet, but enough has been confirmed to give a clearer picture of how levy funding is likely to work in practice.

Some of what’s changing doesn’t sound like much at first. But once you look at how the funding actually works, it does make a difference.

The biggest change is time.

At the moment, levy funds expire after 24 months if they’re not used. Under the new system, that drops to 12 months, so employers will have half the time to use their levy before it expires.

That has a knock-on effect.

There are a few other changes happening alongside this:

• the 10% government top-up is being removed

• employer contributions go up once levy runs out

• levy can be used more flexibly, including for shorter bits of training, not just full apprenticeships

Taken together, these changes affect how far levy funding goes and what it can realistically pay for.

Most employers tend to fall into a few familiar positions when it comes to the levy.

Some don’t use it at all because apprenticeships aren’t part of how they recruit or train.

Others want to use it but are still trying to work out how an apprenticeship scheme would actually work in their business.

There are employers who already use the levy but haven’t yet clocked how the rules are changing or what that might mean for them going forward.

And there are employers who use the levy regularly, but only for a small number of roles. That often means missing chances to train more people, or to use apprenticeships to support things like management, HR, finance or other professional roles that already exist in the business.

The Growth and Skills Levy affects all of those situations.

For most employers, the levy isn’t something they think about day to day. Unless apprenticeships or training are already on the agenda, it tends to sit quietly in the background.

That’s largely been fine up to now. But these changes are happening at a time when employers are already having to be careful about where money goes. Any increase in cost, complexity or uncertainty around training decisions feeds straight into that.

With funds expiring sooner and employer contributions increasing once the levy runs out, the same levy pot won’t stretch as far as it has in the past.

In simple terms, that could mean:

• fewer apprentices being taken on

• less opportunity to use the levy to upskill existing staff

• higher costs once the levy runs out

There is, however, more flexibility in how the levy can be used.

Alongside apprenticeships, employers will be able to use levy for shorter, more targeted training, including modular courses in areas like digital, AI and engineering. For some businesses, that flexibility will be genuinely useful, particularly where a full apprenticeship isn’t the right fit.

But it doesn’t remove the need for planning.

Whether it’s a short course or a full apprenticeship, you still need to be clear about what problem the training is meant to solve, whether you’ve got the time and people internally to support it, and how it fits with what the business actually needs.

The levy is just the funding. It doesn’t make those decisions for you.

Looking ahead to April 2026, the employers most affected by these changes are likely to be those without a clear view of their levy position. Shorter expiry times and higher employer contributions matter far more when levy use is irregular or left too late.

Understanding how much levy is being paid in, what remains in the account and when funds are due to expire makes it easier to see what the levy can realistically support, and where additional costs may come in. Without that visibility, the same funding is simply more likely to run out sooner and support less training overall

A quick explanation of terms, in case it helps: 

The Apprenticeship Levy

A tax paid by larger employers, based on payroll. The money goes into a digital account and can be used to pay for apprenticeship training and assessment.

Government top-up

At the moment, the government adds an extra 10% to levy funds paid into an employer’s account. Under the Growth and Skills Levy, this top-up is being removed.

Co-investment

When an employer has used up their levy, the cost of training is shared with government. Currently employers pay 5% of the cost. Under the new system, that employer contribution increases to 25%.