HOW THE APPRENTICESHIP LEVY WORKS?
There are two types of companies in England. The two categories in which the companies could be categorised are levy-payers (who pay the levy apprenticeship) and non-levy payers (who do not pay the tax).FIND OUT MORE
WHAT IS THE APPRENTICESHIPS LEVY?
The main goal of the levy is to incentive the employers to invest in apprenticeship programs to upskill they already exist staff or to train new apprentices and to boost additional funds to reach a high-quality level in both quality and quantity of apprenticeships.
The Apprenticeship Levy is a payment that is collected from large employers or SME’s in both the public and the private sectors. The payment is collected by the HMRC.
The Apprenticeship Levy paid by businesses can be accessed by those same businesses to fund apprenticeship training for themselves.
WHAT SIZE OF BUSINESS IS SUBJECT TO THE LEVY?
The levy threshold is calculated by size of payroll. Businesses with a wage bill of more than £3 million will be required to pay the levy but if your business have a wage bill under the £3,000,000.00 you will not pay the levy and you will be a non-payer Levy.
If your company based in Uk has a wage bill above £3 million per year you are a levy payer and you need to pay every month 0.5% of your payroll into the apprenticeship levy.
Your levy is collected through the PAYE system by the HMRC. With the funds set aside in your business’ apprenticeship service account, you can pay for apprenticeship training and assessment costs for upskilling your existing staff’s members or to take some new apprentices.
NON LEVY PAYER
If your company’s wage bills are below £3 million per year then you are a non-levy payer and you will not pay the levy apprenticeships. Non-levy paying employers can still benefit from the levy apprenticeship by sending their staff on an apprenticeship and share the cost of training and assessing their apprentices with the Government – this is called ‘co-investment’. More precisely your company will pay 10% of the cost of apprenticeship training and the Government will pay the other 90%, up to the funding band maximum.ALL THE INFORMATIONS HERE
CHECK OUR FAQ
The Apprenticeship Levy applies to both public and private UK employers across all sectors with an annual payroll of £3M or above. Your payroll is based on the total amount of earnings subject to Class 1 secondary NICs. Earnings include any remuneration from employment: wages, bonuses, pension contributions that you pay NICs on but not benefits in kind.
Find out more: https://www.gov.uk/national-insurance-rates-letters
The Apprenticeship Levy is set at 0.5% of your total payroll and is collected monthly via PAYE. There is a £15,000 fixed annual allowance that employers can offset against their levy payments.
The levy allowance operates on a monthly basis and accumulates over the year. This means you have an allowance of £1,250 a month. Any unused allowance is carried over from one month to the next.
EXAMPLE: Calculating what you have to pay
An employer with an annual wage bill of £6m
Levy sum: 0.5% of £6,000,000 = £30,000
Offset allowance of £15,000 (£30,000-£15,000) = £15,000
Annual levy payment = £15,000 (£1250 per month)