What Will the Apprenticeship Levy Mean for You?

In addition, as part of the new apprenticeship regime, there will be changes to the funding for apprenticeship training for all employers.

Will the Apprenticeship Levy affect my business?

If you have an annual pay bill of less than £3m, and don't expect to exceed that threshold in the coming year, then no - it won't affect you. If you have an annual pay bill of more than £3 million, then you will be subject to the Regulations.

However, you should bear in mind that your annual pay bill is a little more complicated than simply your monthly salary payments - bonuses and other benefits could also be relevant (you should consider all elements on which Class 1 NICs are payable). If you may be near the threshold, we recommend looking at the detail of the Regulations to make sure that you understand your obligations.

How does the Apprenticeship Levy work?

The Apprenticeship Levy is essentially a payroll tax which will be charged at a rate of 0.5% of your annual pay bill. However, employers will have a levy allowance of £15,000 to offset against their levy liability (hence employers with a pay bill of less than £3m not being subject to the Regulations).

Once you have declared the levy to HMRC , you will then be able to access the money that you have paid (plus a 10% 'top up' from HMRC) to pay for apprenticeship training. That money will be made available to you through a 'digital apprenticeship service account' to be spent on approved activities with approved training providers. The funds need to be used within two years of being paid into the service account.

For more information on the Apprenticeship Levy, please contact Mark Stevens on 0117 314 5401.