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Apprenticeship Levy

Draft legislation and guidance covering the Apprenticeship Levy, which was announced in the 2015 Autumn Statement, has been published. Comments have been invited by 2 March 2016.

The Apprenticeship Levy will be introduced from 6 April 2017 and will affect employers in all sectors, but will only effectively be paid where the annual pay-bills are in excess of £3 million. An employer’s pay-bill will be based on the total employees earnings subject to Class 1 secondary national insurance.

The levy will be charged at a rate of 0.5% of an employer’s pay-bill. Each employer will  then receive an allowance of £15,000 (0.5% of £3 million) to offset against their levy payment.  There will be a connected party rule, so employers who operate multiple payrolls will only be able to claim one allowance of £15,000. The levy will be collected though PAYE and will be payable alongside income tax and national insurance.

In England those employers who run an apprenticeship programme will be able to reclaim the levy money via a digital voucher to purchase training from a recognised provider.  They could potentially claim more than they actually pay. The apprentices can be recruited from outside the firm or be existing employees put on to a training programme.



Date: 15th February, 2016
Author: David Hadley


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