EC Meeting November 2018

Background

The Apprenticeship Levy - Introduced 6 th April 2016

 It is a monthly, mandatory financial contribution made by employers to the Treasury, collected by HMRC.  The apprenticeship levy requires all employers (Private sector, public sector and third sector organisations) operating in the UK, with a pay bill over £3 million each year, to make an investment in apprenticeships.  Employer’s £15,000 tax allowance can be offset against their levy payments – so only those with an annual payroll in excess of £3M have to pay the levy.  This levy payment is held in a designated account (Digital Apprenticeship Service DAS) that can be accessed by the employer to fund apprenticeships.  Individual employers’ funding for apprenticeship training in England can then be made available to them via a Digital Apprenticeship Service (DAS) account to pay for the training and assessment of apprentices.  Levy funds appear in the employer’s digital account monthly, a few working days after the pay bill and levy contribution has been confirmed to HRMC for the previous month.  The government will top up this amount by 10%. Therefore the employer will have more to spend than what they put in on apprenticeship training and end point assessment.  If the employer chooses not to spend the levy on apprenticeships, their levy contribution will not be returned to them.  Where employers are “connected” (a company has control of another company or both companies are under the control of the same person or persons) they can only utilise the £15,000 tax allowance once. o i.e. three “connected companies” with an individual annual payroll of £3m would have to pay the levy on the total combined wage bill above £3m, therefore would it pay the levy on £6M.  Employers recoup their levy contribution if they take on apprentices.

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