Apprenticeship Levy

Posted by Grant Saunders

From 6th April 2017, the way the government funds apprenticeships is changing. UK Employers with an annual pay bill of over 3 million pounds will need to pay a levy.

An annual pay bill represents payments made to employees that:

  • are subject to class 1 employer NIC’s; this would include components such as wages, bonuses and commission
  • employees with earnings above the LEL & ST
  • employees under the age of 21 and apprentices under the age of 25

The pay bill calculation does not include:

  • employees under the age of 16
  • employee earnings which are not subject to UK NIC legislation
  • earnings on which class 1a are payable

The amount of the levy is 0.5% of the employer’s annual pay bill but there is an allowance for employers to the amount of £15,000 which may be set against the levy.

We can calculate, process and report the levy for you through the payroll.  The amount of the levy will be reported on your P32 form and this will need to be paid to HMRC along with the PAYE & NIC liability you pay each month.  We will let HMRC know that there is a levy payable when we process your RTI submissions.

More detailed information on the new Apprenticeship Levy can be found here.

If you would like to discuss how we can help, please contact us.