Apprenticeship levy

The UK government is committed to the introduction of more rigorous apprenticeship standards (the Trailblazer Initiative) and aims to provide 3m apprenticeships over the five year term of government.

Do you have a £3m UK Paybill?

The UK government is committed to the introduction of more rigorous apprenticeship standards (the Trailblazer Initiative) and aims to provide 3m apprenticeships over the five year term of government.

As a result, from 6 April 2017 the way the government funds UK apprenticeships is changing with the introduction of the apprenticeship levy.

Control of apprenticeship funding will be put in the hands of employers through the Digital Apprenticeship Service (DAS).

The rate

The levy will be charged at a rate of 0.5% of an employer’s pay bill (i.e. total employee earnings subject to Class 1 Secondary National Insurance Contributions) and be collected through Pay As You Earn (PAYE) Real Time Information (‘RTI’) employer submissions.

All employers (subject to the rules on connected companies below) will have an annual levy allowance of £15k to offset against their levy liability. However, employers with annual pay bills greater than £3m will still be required to pay the apprenticeship levy at 0.5%.

Employers with a pay bill close to £3m should monitor this throughout the tax year in case of increases.

The 0.5% levy is on your full UK payroll bill, not just the amount over £3m.

You should also be aware that although the levy is calculated based on your full UK pay bill, you will only be able to only spend your ‘English’ proportion on ‘English’ apprenticeship training.

Connected companies

Connected companies and connected charities only have a single £15k levy allowance for the group. Where companies/charities are connected (for example one with a pay bill of £2.5m and the other with a pay bill of £3m) they have the £15k levy allowance to share between them and will have a levy liability to pay and report.

Paying the levy & accessing funding

HM Revenue & Customs (HMRC) administer how you pay the levy and the Department for Education/Skills Funding Agency administer how you access your funding.

Levy-paying employers can use the DAS to access their funds and manage and pay for their apprenticeships in one place. Your levy payment will be ring-fenced in the form of an electronic voucher (managed through your DAS account) to be used to purchase apprenticeship training. Non-levy paying employers will continue to pay providers directly for apprenticeships but can still use the DAS to find and plan their apprenticeship training.

Can I use the levy to train my existing staff?

Your Internal Workforce Development Program can be funded through the apprenticeship levy, provided the employee will be learning new skills/knowledge, the apprenticeship is relevant to their role and is the most appropriate way towards progressing their career.

For further information on how to allocate your allowance and when and how you need to pay the apprenticeship levy, please contact Kerry Hudson or Kiki Stannard below.

Kerry Hudson
Director
+44 (0)20 7430 5913 / khudson@fitzandlaw.com

Kiki Stannard
Partner
+44 (0)20 7430 5984 / kstannard@fitzandlaw.com

As seen in


AA.png TFT.png CNN.png RAC.png ECO.png SU.png EMM.png TCN.png

Awards & Associations Legal GDPR & IT Compliance Website Privacy Policy Copyright Sitemap

Download our TaxApp

© 2019 Fitzgerald & Law. All rights reserved. Incorporated In England and Wales. Company No: OC300023.


We use cookies on this website, you can find more information about cookies here.