Apprenticeship levy – who pays?

The government has reformed the way apprenticeships are delivered and funded in England.

This places greater ownership on employers whilst providing increased opportunities available to individuals. The apprenticeship levy is important for businesses wanting to grow.

Apprenticeship levy

The apprentice levy came into force on 6 April 2017, it hopefully puts apprenticeship funding on an even keel and allows for future growth in the apprenticeship programme. Above all, investment is needed in training young people as many sectors have reported skills shortages.

The levy applies to all employers operating in the UK. This is regardless of the sector, location and whether a business currently employs apprentices.

The charge is 0.5% of the employer’s total annual pay bill. An annual levy of £15,000 is available to each employer, but it’s worth bearing in mind that £15,000 would be the total for groups of companies. The companies decide how to split the levy across their businesses.

If your annual pay bill is less than £3million

You won’t pay the levy, provided you have the full levy (i.e. you are not part of a group). Of course, you can still take on apprentices and will continue to receive the support of the cost of their training from the government.

It is worth noting that if your bill is close to the £3million cap you should monitor this closely in case it you exceed the amount and become liable to report this tax.

apprenticeship levy
If your annual pay bill exceeds £3million

All businesses and charities are required to report and pay the levy.

Paying the levy

You must pay the amount due to HMRC. This can be done through your usual payroll processes.

You must also report your apprenticeship levy on the Employer Payment Summary (EPS) within fourteen days after the end of each tax month.

How does it work?

More information and guidance can be found on gov.uk website

For more information

If you are over, or close to the threshold, talk to our payroll team who can advise you on the next steps you need to take, please contact:
Sharon Hewitt, or call us on:

01483 416232