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Groups of companies can share the apprenticeship levy allowance

The government has announced that it intends to amend the Finance Bill to give small business owners greater flexibility in managing the cost of the apprenticeship levy.

The levy is due to apply from April 2017 at the rate of 0.5% of total employment costs, subject to a £15,000 allowance.  The government originally proposed that if companies were connected only one employing company in the group could claim the allowance.  However, it has decided to allow a group of connected employers to decide what proportion of the £15,000 allowance each employing company may claim.

Hopefully, this additional flexibility will mean that groups of companies will be able to use the allowance in full.  If that is the case, then provided their combined pay bill does not exceed £3m they will not have to pay the levy at all.

As a point of detail, the decision to spread the levy allowance among connected companies must be taken at the beginning of the tax year and will be fixed for 12 months.  Details relating to how the decision will be notified are expected in due course.



Date: 26th May, 2016
Author: Cathy Corns


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