From the 6th April 2017, the Government is introducing an apprenticeship levy. The levy requires all employers operating in the UK, with a wage bill over £3 million each year, to invest in apprenticeships.
Employers hitting the wage bill criteria will have to pay a monthly sum to the Government, through their PAYE, that will be placed into a digital account that the employer can draw on to fund the external costs of apprenticeship training. Funds collected but not used are likely to be spread amongst other employers.
The levy will be different for all employers because it is calculated as 0.5% of their annual wage bill. However, every employer will receive an allowance of £15,000 which can be offset against their levy amount. For example, if the annual wage bill is £4 million, 0.5% of this is £20,000. From this amount you would deduct the allowance of £15,000, meaning the levy payable is £5000 per annum.
If this affects your business, it is important that you make your finance team aware of the need to pay the levy.
Fiona Haworth. You can contact Fiona on email@example.com
If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Fiona on the above.