The Apprenticeship Levy

The Apprenticeship Levy was introduced in April 2017.    This will be a levy on UK employers to fund new apprenticeships following the Government's committal to boost productivity by investing in 'human capital'.     As part of this commitment, the Government wants to develop vocational skills and to increase the quality and quantity of apprenticeships. 

If you are an employer with a pay bill greater than £3million per year then you will be subject to this additional levy.    The payment will be made to HM Revenue and Customs with your usual PAYE payment, and will be shown on the P32 report that you receive from us.    Whether you are affected by the levy or not will make no change to the training funding for apprentices who started before 1st May 2017 - you will be expected to continue funding these apprenticeships under the terms and conditions that were in place at the time the apprenticeship started. 

The levy will be calculated at  0.50% of your Gross NI'able Pay.   You will receive an allowance of £15,000 per annum to help with the costs, which will be split over your tax year (so divided by 52 weeks if it is a weekly payroll; 12 months if it is a calendar monthly and so on)   

In April 2017, XYZ Limited had a gross NI'able pay of £1,058,393.84.  

0.50% of this is £5,291.96

Take off the allowance of £1,250.00 gives you £4041.96 

The levy is rounded down to the next whole pound so in this example it would be £4041.00

If you are a levy paying employer, you can create an account of the apprenticeship service to: 

Receive levy funds for you to spend on apprectices

Manage your apprentices

Pay your training provider

Stop or pause payments to your training provider 

The link to the Gov.UK site where the account is created can be found here   https://www.gov.uk/guidance/manage-apprenticeship-funds