The Apprenticeship Levy will be introduced from April 2017. This new deduction is for investment into apprenticeships at 0.5% of the annual pay bill.
Will this affect you?
The levy itself will be calculated at 0.5% from an employer’s pay bill. Each employer will receive a £15,000 offset allowance each tax year. Therefore, only companies with a payroll bill above 3 million will need to contribute into the scheme from April 2017.
0.5% x £2 million payroll bill equals £10,000 apprentice levy due, subtract the levy allowance of £15,000 equals a zero-annual levy payment due.
0.5% x £4 million payroll bill equals £20,000 apprentice levy due, subtract the levy allowance of £15,000 equals a £5,000 levy payment due.
All entities’ paying employees through PAYE
All payroll systems will need to be able to record the Apprenticeship Levy, once the 3 million pay bill level is breached you will need to calculate, report and pay it on a monthly basis to HMRC, through the PAYE process alongside any tax and NIC payments due.
HMRC can impose penalties for not reporting apprenticeship levy to HMRC through RTI and for non-payment. Penalties and appeals follow the same structure as the income tax procedures currently in use.
If you have any queries, or would like to discuss, call Lee Reynolds, Payroll Manager on 01788 539000.