The Apprenticeship Levy will be introduced in April 2017 to all employers operating in the UK, with a pay bill over £3 million each year, to invest in apprenticeships. Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions such as wages, bonuses and commissions.
Apprenticeship Levy is charged at 0.5% of your annual pay bill but you are given a £15,000 annual allowance to offset against this.
For example: If your April 2017 pay bill is £300,000, your levy of 0.5% would be £1500 less £1250 allowance, so you would pay a £250 levy for April 2017.
If you are unsure if you qualify, you must contact HMRC for further advice. As with the employment allowance, this levy is shared across a group of linked companies.
The levy will not affect the way you fund training for apprentices who started an apprenticeship programme before 1 May 2017. You’ll need to carry on funding training for these apprentices under the terms and conditions that were in place at the time the apprenticeship started.
You will report and pay your levy to HMRC through the payroll process via an RTI EPS submission each month. Once you have declared the levy to HMRC, you will be able to access funding for apprenticeships through the new apprenticeship service account. HMRC are working with employers to test and improve the service before inviting all levy-paying employers to register for the service.
- Increases in minimum contributions for automatic enrolment pensions - September 12, 2017
- The Apprenticeship Levy - February 13, 2017
- Personal Tax Account - October 13, 2016