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Could you explain to me why I'm having to pay the apprenticeship levy?

Good afternoon and thank you for your question.  I assume, given the nature of the question, that you are employed by an umbrella company but, unlike Contractor Umbrella Limited, your umbrella company does not fully explain the background to the various deductions they make when paying you.

From 6th April 2017 Umbrella Companies, as employers with a payroll figure over £3m per annum, have a legal obligation to pay the Apprenticeship Levy contributions to HMRC. These contributions are made from the funds received from the recruitment agency/client with whom the Umbrella Company will have a business to business contract.  The Umbrella Company will also deduct its margin from the contract value.

You presumably work with the Umbrella Company under an over-arching contract of employment and your salary is calculated as the contract value, less the Umbrella Company's margin, less the amount payable to HMRC for employer's NI and the Apprenticeship Levy.  That salary will then be subject to income tax and employee's national insurance contributions.

I hope that clarifies the position for you.