The Department for Business Innovation and Skills has published additional information about the apprenticeship levy which can be found here.
The levy will apply to all UK employers in both the private and public sectors.
It is payable on annual pay bills of more than £3 million. Employers with an annual pay bill of less than £3 million will not pay the levy. These employers will continue to have access to government funding to support apprenticeships.
Further information is expected to be provided in June 2016 about the support employers can expect.
The document confirms that the government are working with the relevant Industry Training Boards for the construction and engineering construction industries. They will be consulting with their members ahead of the introduction of the apprenticeship levy on how their existing arrangements will be affected and whether any changes are required.
They are also working with other sectors, where there are existing collective training arrangements (ie the tonnage tax in the maritime sector), about what the apprenticeship levy means to them.
We already know that the levy will be charged at a rate of 0.5% of an employer’s pay bill with the levy payments being collected monthly by HM Revenue and Customs (HMRC) through Pay as You Earn (PAYE), payable alongside tax and National Insurance – the inference being that the figure will appear on the EPS. Interestingly, the “pay bill” will be based on gross employee earnings subject to Class 1 secondary National Insurance contributions (NICs). There were some pundits proposing that the “paybill” would also have to include employer’s secondary class 1 NI.
There will be a £15,000 fixed annual allowance for employers to offset against their levy payment. A connected person rule, similar to the one used for the Employment Allowance, will mean that employers who operated multiple payrolls will only be able to claim one allowance for the levy.
The money will be collected by HMRC. Individual employers’ funding for apprenticeship training in England will then be made available to them via a new Digital Apprenticeship Service (DAS) account. Employers will be able to use this to pay for training for apprentices. The service will also support employers to identify a training provider, choose an apprenticeship training course and find a candidate.
The DAS will also enable employers to:
select an apprenticeship training course choose the training provider or providers they want to deliver the training post apprenticeship vacanciesThe main functions of this service will be in place by April 2017.
