The apprenticeship levy calculation
Apprenticeship levy The Apprenticeship Levy is a UK tax on employers which is used to fund apprenticeship training. It is payable by all employers with an annual pay bill of more than £3 million, at a rate of 0.5% of their total pay bill. It is collected through PAYE alongside other employment taxes. is charged at a rate of 0.5% of an employer's total pay bill. This will be added to the PAYE PAYE or Pay as you earn is an HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment. payment to the HMRC His Majesty's Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, the administration of other regulatory regimes including the national minimum wage and the issuance of national insurance numbers., however you can offset the cost as employers are given an allowance of (Undefined variable: amounts.Apprenticesip levi) (Undefined variable: amounts.Current tax year).
This means that the company will only have to pay contributions if the total pay bill exceeds (Undefined variable: amounts.App levi pay billl) per tax year.
There are a few points to note about the Apprenticeship Levy Allowance
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You get the allowance over the corporate group.
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It is calculated on a cumulative basis.
Where several employers are connected as a group, they will only be able to use a total levy allowance of £15,000, divided across the group.
HMRC will use the same criteria for connected companies and charities as they currently employ for Employment Allowance A scheme where a business can claim a reduction in the amount of employer's National Insurance contributions (NICs) they have to pay..
You can get more information on the GOV.UK Website
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/308734/connected-companies.pdf
If you are part of a group of connected employers, you must decide what proportion of the levy allowance each employer in the group will be entitled to. You must make this decision at the beginning of the tax year and is fixed for that tax year. Each employer in the group will then calculate what they have to pay with only their portion of the levy allowance.
You may find that you have to pay the apprenticeship levy in a single month, and then get the money back in the following month. For example: if you pay annual bonuses.
You can get more information from GOV.UK
https://www.gov.uk/guidance/pay-apprenticeship-levy