The apprenticeship levy is part of the Government’s plan to increase apprenticeships and is a new tax which aims to fund 3 million new apprenticeships in England by 2020. The Government’s aim is that the new levy should help to improve both the quantity and the quality of apprenticeships and will come in to effect in April 2017.
The apprenticeship levy only applies to employers with an annual pay bill of more than £3 million, they will start paying the levy in May 2017.
Each month, you must:
Any apprenticeship levy payment to HMRC will be allowable for Corporation Tax.
1) Work out what your total pay bill is.
Your pay bill is made up of the total amount of your employees’ earnings that are subject to Class 1 National Insurance contributions. Employees’ earnings include any money they make from employment, such as:
We will not charge the levy on other payments to employees, such as benefits in kind.
2) Work out what 0.5% of your total pay bill is.
3) Subtract the £15,000 allowance.
An employer with an annual pay bill of £5,000,000 will need to spend £10,000 on the levy: