The Chancellor of the Exchequer announced the introduction of an Apprentice Levy in his Summer Budget on 8 July 2015, part of a government commitment to create 3 million new apprentice starts by the end of this Parliament.
In his speech the Chancellor stated:
“The most successful and productive economies in the world are committed to developing vocational skills. That is why this government has committed to significantly increase the quantity and quality of apprenticeships in England to 3 million starts this Parliament, putting control of funding in the hands of employers.”
He announced that the apprenticeship schemes would be funded by introducing a levy of 0.5% payable by all large UK employers. The aim of this is to “reverse the long-term trend employer underinvestment in training”. Government support will be available from the fund for those employers who do not pay the levy.
This levy is being called a “Paybill” with the intention that the money is collected alongside tax and NI.
Employers will be able to claim an allowance of up to £15,000 which they can offset against the levy. Effectively this means that employers with paybills of less than £3 million will not actually pay the levy but they will be able to benefit from the fund. By definition the paybill is the earnings subject to secondary (employer) Class 1 NI.
The levy is to be introduced in April 2017 and the long awaited draft legislation has just been published together with explanatory notes, these can be foundhere.
There is only a short consultation period which ends on 2nd March 2016.