From 5 April 2017 HMRC has introduced an apprenticeship levy. The levy is charged at 0.5% of the businesses total payroll cost and applies to all businesses operating payroll.

 

Each business receives a £15,000 allowance each tax year which means that they do not have to pay the levy until 0.5% of their payroll cost exceeds this allowance. Ordinarily this means that unless your total payroll costs exceed £3,000,000 per year, you would not have to pay the levy.

 

However, if your business is part of a group then £15,000 allowance is split between the whole group. It then must be decided how to use that allowance. It can be allocated between all businesses, in any proportion you like, or it can be wholly given to one business. This means that it is possible for businesses with much lower payroll costs to still be required to pay the levy.

 

Using the levy

If you have to pay the levy, you are also entitled to use it. You can register to use the apprenticeship service. You can use the service to receive levy funds to spend on apprenticeships, manage your apprentices and manage payments to your training provider.

More information on the apprenticeship levy and online service is available here.

Please let us know if you have any further questions.