We're using the apprenticeship #LevyForChange
What is your annual payroll?
Employers with a payroll of more than £3million are required to pay 0.5% of their total annual payroll into the Apprenticeship levy
Small employers don't pay.
Smaller employers, with a payroll of less than £3million per annum, can still access funding to train Apprentices on their teams
Why have an apprenticeship levy?
Apprenticeships in England have evolved significantly over the past 50 years and this is the latest update to the system. The new system is structured to encourage all businesses with a payroll over £3 million a year to invest in Apprenticeships.
This is good news as there are still problems in England relating to both youth unemployment and the skills gap that Apprenticeships are designed to fill. More companies need to be investing in more young people and the Levy should go some way to make this a reality.
How does it work?
If your business’s annual payroll is £3 million or more than in May 2017 you must start contributing towards the Levy by reporting and paying monthly to the HMRC through PAYE alongside tax and National Insurance Contributions.
The Levy is calculated at 0.5% of payroll, but you get a £15,000 allowance against your total due. This means that if your business had an annual pay bill of £10,000,000 you would pay just £35,000. This is calculated as follows:
(£10,000,000 x 0.005) – £15,000 = £35,000)
Group companies are only able to use one £15,000 allowance. So, if you are part of a group your allowance will need to be shared out, and this must be declared at the beginning of the tax year.
Need more information about the levy?
We realise that the Apprenticeship levy is a bit of a minefield if you’ve never had to deal with it before!
Get in touch with one of our friendly team below to find out how your business can benefit from the levy!