The Apprentice Levy

The Apprenticeship Levy Overview

Announced in 2015, the Apprenticeship Levy aims to fund three million apprenticeships in the UK by 2020.

It affects all organisations above a certain size, committing them to paying a percentage fee of their PAYE wage bill and having the expectation to employ apprentices. This section of our website is dedicated to informing companies that operate in the nuclear sector with up to date information on the Apprenticeship Levy and other apprenticeship policy developments, how to meet its requirements, how to recover the monies that you will pay to HMRC and how to get started.

What is the Apprenticeship Levy?

The apprenticeship levy is a new tax. It starts in April 2017 and applies to all employers. If your annual payroll is more than £3m you will pay 0.5% into the apprenticeship levy each month. The levy will be collected via PAYE.

Employers will receive an allowance of £15,000. The effect of this allowance is that the levy will only be payable on a pay bill in excess of £3,000,000 – employers with a pay bill less than £3,000,000 will not pay anything.

 

A few examples:

A company employing 250 employees, each with a gross salary of £20,000

Paybill: 250 x £20,000 = £5m

Levy sum: 0.5% x £5m = £25,000

Amount to pay: £25,000 ‐ £15,000 = £10,000 annual levy payment

 

A company employing 250 employees, each with a gross salary of £45,000

Paybill: 250 x £45,000 = £11,250,000

Levy sum: 0.5% x £11.25m = £56,250

Amount to pay: £56,250 ‐ £15,000 = £41,250 annual levy payment

 

Employer of 100 employees, each with gross salary of £20,000

Paybill: 100 x £20,000 = £2m

Levy sum: 0.5% x £2m = £10,000

Amount to pay £10,000 ‐ £15,000 = £0 annual levy payment

 

Even if you only employ a small number of staff, if they are well‐remunerated, it may breach the £3 million pay threshold.