Businesses need to be aware of the many misconceptions around the new Apprenticeship Levy.
The measure, announced in the Summer Budget 2015, comes into effect on 6 April as a blunt instrument used to stimulate growth in the number of apprentices.
Andrew Sanford, partner, said: “There are many misconceptions about the apprenticeship levy. First, it does not just affect big businesses. All businesses, if they employ an apprentice on an approved programme, can get access to Government funding for training up to 90% of the cost.
“Secondly, apprentice programmes are available to all ages. Whilst there is tax relief available on Employers National Insurance for those under the age of 25, there is funding available for anybody on an approved training programme.”
He added: “Groups of companies and connected companies need to be vigilant as there is only one tax-free allowance of £3million. The laws concerning connected companies are complicated and if in doubt they should obtain professional advice.
“All companies who are subject to the levy must register as soon as possible online. As ever, there are penalties for non-compliance.”
Apprenticeship Levy in brief
If a company or group of companies has a payroll of greater than £3 million, for any amount over £3 million annually the company/group will pay tax at 0.5% of the gross wage. The levy can be reduced or totally eradicated by employing apprentices and using the money for their training. Indeed if all of the levy is used up, then the government will then pay 90% of the funding on the additional training.
For more information please contact Andrew Sanford at email@example.com