Apprenticeship Levy is an amount paid at a rate of 0.5%of an employer’s annual pay bill.As an employer, you must pay Apprenticeship Levy each month if you have an annual pay bill of more than £3 million or are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million.
You must report and pay Apprenticeship Levy monthly through your Employee Payment Summary. All sectors must pay the levy if they have an annual paybill of over £3 million (including any connected companies or charities).
Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions such as wages, bonuses, and commissions.Your pay bill must include payments to:
· all employees earning below the Lower Earnings Limit and the Secondary Threshold
· employees under the age of 21
· apprentices under the age of 25
Your pay bill must not include earnings:
· of employees under the age of 16
· of employees who are not subject to UK National Insurance contributions legislation
· on whichClass 1A National Insurance contributions are payable, such as benefits in kind
If you run a modified PAYE scheme you need to account for National Insurance contributions as usual. Use a best estimate of all earnings that are subject toClass 1 secondary National Insurance contributions to check if you need to pay the Apprenticeship Levy. You need to submit an Employment Payment Summary each month using these estimated figures.At the end of the tax year, you also need to:
· check your estimated pay bill against the actual figures for the tax year
· submit an extra Employment Payment Summary to correct any difference and pay any Apprenticeship Levy owed
Your Apprenticeship Levy allowance of £15,000 can be divided between:
· all your PAYE schemes
· your connected companies or charities
You can decide how to split the allowance between your PAYE schemes or with your connected companies or charities. You must report how you’ve divided your allowance the first time you must pay Apprenticeship Levy. You cannot change your share of the allowance during the tax year.
You must continue to apply the levy allowance that was divided at the beginning of the tax year if, part way through the year:
· you become a connected employer (such as by merging with or acquiring another company)
· the structure of your group of connected companies or connected charities changes (such as by demerging with another company)
You can decide how you divided your levy allowance across your connected companies or charities at the start of the next tax year. You cannot change where the allowance has been divided across connected companies or charities at the end of the tax year. Employers with multiple PAYE schemes who do not use their fullApprenticeship Levy allowance during the year, can change how this has been divided at the end of the tax year. This can be done to offset any unused allowance against another of your schemes.
Your Apprenticeship Levy allowance of £15,000 can be divided between:
· all your PAYE schemes
· your connected companies or charities
You can decide how to split the allowance between your PAYE schemes or with your connected companies or charities. You must report how you’ve divided your allowance the first time you must pay Apprenticeship Levy. You cannot change your share of the allowance during the tax year.
You must continue to apply the levy allowance that was divided at the beginning of the tax year if, part way through the year:
· you become a connected employer (such as by merging with or acquiring another company)
· the structure of your group of connected companies or connected charities changes (such as by demerging with another company)
You can decide how you divided your levy allowance across your connected companies or charities at the start of the next tax year. You cannot change where the allowance has been divided across connected companies or charities at the end of the tax year. Employers with multiple PAYE schemes who do not use their fullApprenticeship Levy allowance during the year, can change how this has been divided at the end of the tax year. This can be done to offset any unused allowance against another of your schemes.