What is Apprenticeship Levy?
Employers in all sectors with an annual pay bill over £3 million will pay a levy of 0.5% of their pay bill – but only after the first £3 million. If an employer’s annual pay bill is £3 million or less then no levy will be charged at all.
For apprentices 16-18 you will receive a £1000 support payment from the government. The levy payments are made monthly to HMRC starting in April 2017 through PAYE. The pay bill is calculated as the total earnings subject to class 1 secondary NICs.
Employers can use their levy contribution to pay for training through approved suppliers such as TheLightBulb. The government will top up your levy payment by a further 5%. The funds are accessed by digital account from the end of May 2017.
Any unused levy contributions will be retained by the government after 24 months. If you don’t use it, you will lose it! For employers under the £3m threshold the government will pay for 95% of your apprentice training costs, meaning you only need to contribute 5%. If you’re an employer with less than 50 staff then better still, the government will pay for 100% of the costs for apprentices aged 16-18.