Blick Rothenberg

Payroll update

05.12.2016

Written by: Mark Abbs

The Apprenticeship Levy

What is it?
In April 2017 the way the government funds apprenticeships in England will change. Some employers will be required to contribute to a new apprenticeship levy, and there will
be changes to the funding for apprenticeship training for
all employers.

Does it apply to me?
The apprenticeship levy applies to all employers who operate in the UK, in any sector, with a pay bill of more than £3m each year. For the purposes of the levy, an ‘employer’ is someone who is a secondary contributor, with liability to pay Class 1 secondary NICs for their employees.

How much do I pay?
The levy will be charged at a rate of 0.5% of your annual pay bill. You will have a levy allowance of £15,000 per year to offset against the levy you must pay. This means you will only pay the levy if your pay bill exceeds £3m in a given year.

How do I pay it?
Employers will pay the levy to HMRC through the PAYE payroll process. If you have calculated that you will pay the apprenticeship levy, you will need to declare this and include it in your usual PAYE payment to HMRC by the 19 (or 22 if you report electronically) of the following month. The first submission in which you will declare that you will pay the levy will therefore be in May.