From 2017 the government are introducing a new apprenticeship levy. The Levy will be paid by large employers with a wage bills of £3 million or over and is charged at 0.5% of the organisations total payroll, this includes any connected organisations or charities.
All businesses receive a £15,000 annual allowance which they can deduct from their monthly payment. This in effect means that a company with a wage bill of exactly £3 Million would pay nothing.
How much of the Apprenticeship Levy will you pay?
For the first month of the tax year:
Divide your Apprenticeship Levy allowance by 12.
Subtract this figure from 0.5% of your monthly pay bill.
For each of the following months:
Calculate your total pay bill for the year to date.
Add up your monthly levy allowances for the year to date.
Subtract your levy allowance for the year to date from 0.5% of your total pay bill for the year to date.
Subtract the amount of the levy you’ve paid in the year to date. (Information Copied from HMRC)
The good news…
The good news is that you can use the money you pay in to fund apprenticeships in your organisation, also the government will add 10% onto all your payments. This means that for every £1 you pay you have £1.10 to spend on apprenticeship’s.
For full details of the new system visit GOV.UK