Apprenticeship levy

27 January 2017

HMRC has published draft legislation for the apprenticeship levy. Further guidance on certain aspects of the levy has also been published.

As an employer, you’ll have to pay the apprenticeship levy each month from 6 April 2017 if you:

  • have an annual pay bill of more than £3m (based on pay subject to NICs); or
  • are connected to other employers (companies or charities) for employment allowance purposes, where the total annual pay bill of the connected employers is more than £3m.

Employers that are not connected to other employers will have an apprenticeship levy allowance of £15,000 each year. Employers that are connected to other employers can decide how to split the allowance between the connected organisations, but this allocation must be applied the first time that the levy is paid in a tax year and cannot then be changed during the 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 (CITB) levy.

The technical consultation on the draft apprenticeship levy regulations continues and anyone wishing to respond to HMRC must do so by 3 February.

The Department of Education has produced guidance on how employers in England can access the funds in their digital accounts and the Scottish Government has also published a report setting out how it intends to use the funds generated for it by the UK-wide levy.