Apprenticeship Levy 2017

• What is the Apprenticeship Levy?

The Apprenticeship Levy is a new tax that will be introduced in April 2017 by the government, with an aim to increase the amount of placed apprentices in the UK to 3 million by the year 2020.

• Who will be affected?

If your business has an annual payroll of £3 million or more, you will be eligible to pay 0.5% to this levy each month. However, companies will receive a £15,000 offset allowance every tax year. For example; an employer with an annual pay bill of £10 million would only be liable to pay £35,000 as 0.5% of £10 million is £50,000 minus £15,000 allowance.

• How will an eligible company pay?

You will need to calculate, report and pay HMRC on a monthly basis through the PAYE process alongside Tax and NICs. You will then be able to access funding for apprenticeships through a new digital apprenticeship service account.

• What if I don’t meet the criteria to pay into the Levy?

You will still need to make a small contribution towards training an apprentice. The government have proposed that they will pay 90% of these costs with the company paying 10%. If your company has less than 50 employees, you won’t need to pay anything for apprentices’ between 16 and 18 years old.

• What are the advantages of the Apprenticeship Levy?

With the number of apprenticeships increasing, the skill gaps we currently see across the recruitment industry will start to close. Recently, recruitment agencies are struggling to find candidates with the necessary skills and qualifications to fill particular roles, especially in the IT sector.

• The Digital Apprenticeship Service

Through this service, all employers, will be able to select an apprentice framework or standard, choose the training provider, choose the organisation that will complete the assessment’s and look at post apprenticeship vacancies. If you are an employer that pays into the levy you can use the service to set the price you’ve agreed with your training ​provider, pay for apprenticeship training and assessment via a voucher process and tell HMRC to stop or pause payment if applicable.

Keep an eye on our website – www.outsauce.net for more information on the apprenticeship levy closer to April – we will keep you updated on all you need to know.

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