Paying the apprenticeship levy

Employers with an annual pay bill of more than £3 million will need to spend 0.5% of their total pay bill on the apprenticeship levy minus ‘levy allowance’ of £15,000 per year. This is reported and paid to the HMRC through the PAYE process. A 10% top-up is applied to the funds by the Government.

Where several employers are connected as a group, they will only be able to use one £15,000 levy allowance. The definition of connected companies and charities is based on the definition in the Employment Allowance.

If you are part of a group of connected employers, you must decide what proportion of the levy allowance each employer in the group will be entitled to. You must make this decision at the beginning of the tax year and will be fixed for that tax year, unless a correction is necessary because the total amount of the levy allowance claimed across the group exceeds £15,000. Each employer in the group will then calculate what they have to pay through the same processes set out above, but using only their portion of the £15,000 levy allowance.

Last modified: Wednesday, 18 January 2017, 10:34 PM