When you have to pay Apprenticeship Levy and how to report your payments.
As an employer, you’ll have to pay Apprenticeship Levy each month from 6 April 2017 if you:
*Have an annual pay bill of more than £3 million
*Are connected to other companies or charities for Employment Allowance which in total have an annual pay bill of more than £3 million
Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions. You must include payments to:
*All employees earning below the Lower Earnings Limit and the Secondary Threshold
*Employees under the age of 21
*Apprentices under the age of 25
Employers who aren’t connected to another company or charity will have an Apprenticeship Levy allowance of £15,000 each year. This means the Apprenticeship Levy you have to pay is reduced by £15,000 across the year. You can’t carry over any unused allowance into the next tax year.
If you start or stop being an employer part way through the tax year you can use your full annual Apprenticeship Levy allowance against the amount of the levy that you owe.
Your Apprenticeship Levy allowance of £15,000 can be allocated between:
You must continue to apply the levy allowance that was allocated at the beginning of the tax year if, part way through the year:
Public bodies each get a full Apprenticeship Levy allowance as they aren’t considered to be connected companies.
NHS trusts and other health service bodies (such as Scottish Health Boards, Welsh Local Health Boards or Irish Health and Social Care Trusts) are considered to be companies and therefore have to follow the connected companies rules.
Public bodies which are charities must follow the rules for connected charities.
Apprenticeship Levy is charged at 0.5% of your annual pay bill.
You can use HMRC’s Basic PAYE Tools to help you work out how much you need to pay.
For the first month of the tax year:
Any unused allowance can be carried forward into the next month within the same tax year.
You’ll still need to pay Apprenticeship Levy even if you already contribute to an industry-wide training levy arrangement, for example the Construction Industry Training Board Levy.
From 6 April 2017, you’ll need to tell HMRC how much Apprenticeship Levy you owe each month:
Connected companies or charities will each need to tell HMRC how much Apprenticeship Levy they owe.
Report your Apprenticeship Levy each month using your Employer Payment Summary (EPS) and include the following: