How will the change to apprenticeship funding impact your business?

Any apprenticeships that start after 1 August 2026 will be subject to the new funding rules.

Apprenticeships are becoming increasingly popular as employers seek to cultivate new talent and work around the challenges that rising employment costs bring, as there were 308,770 starts between August 2025 and April 2026, up 8.7 per cent year-on-year.

Employers considering using apprenticeships should be aware of how the changes may affect them.

How has apprenticeship funding changed?

Most years bring with them changes to apprenticeship funding rules, so it is necessary for employers to keep pace and ensure that they are aware of how apprenticeships are affected.

The 2026/27 rules establish that:

• The minimum number of off-the-job hours training apprentices must complete is an absolute minimum of 187 hours – the actual minimum may vary based on the apprenticeship.
• Employers must keep the PAYE information in their Government apprenticeship service account accurate and up to date.
• Individualised learning records and planned end dates must not change when submitted – this applies even if the apprenticeship agreement is extended.
• Off-the-job training and active learning do not include English and maths as standalone qualifications, even if the apprentice requires it to do their work.

These rules also come alongside the obligation for the employer, provider and learner to agree on whether the training plan was effectively delivered once the apprenticeship programme comes to an end.

Is the apprenticeship levy affected by the funding changes?

There may be an additional financial burden for employers that pay the apprenticeship levy in the wake of the funding changes.

The supplementary payment of 10 per cent that the Government previously issued will no longer be made, which means this will no longer be added to new funds entering apprenticeship levy accounts.

In cases where the apprentice is older than 25 and the employer does not pay the levy, the employer co-investment rate is five per cent.

The employer co-investment rate may increase to 25 per cent if the levy payer has insufficient funds in their apprenticeship service account.

Employers who do not pay the levy and have apprentices who are between 16 and 24 at the start of their training will benefit from the Government funding all the apprenticeship training and assessment costs, up to the maximum amount.

It can be challenging to understand how changes to funding and rules will impact your budget, so seeking expert accounting support can ensure that you know the full effect the changes will have for you.

This is true regardless of whether you pay the levy or not.

Our expert team can support you with cash flow forecasts that have apprenticeship hiring costs factored in, empowering you to make better use of any funding and incentives available.

If you want to know how your specific business will be affected by the changes to apprenticeship funding, speak to our team today.