Apprenticeship Levy Payer FAQs

Levy Payer frequently asked questions

The Apprenticeship levy is a tax that will support the government’s pledge to create three million Apprenticeship starts by 2020.

Your pay bill will be based on the total amount of earnings subject to Class 1 secondary NICs (National Insurance Contributions).

It will be collected by Her Majesty’s Revenue and Customs (HMRC), through the PAYE process alongside tax and National Insurance.

Yes, the levy payment is 0.5% of your total gross pay bill.

The government will apply a 10% top-up to the funds you have for spending on Apprenticeship training in England. They will apply the top-up monthly, at the same time the funds enter your Apprenticeship Service Account. That means for every £1 that enters your digital account to spend in England on apprenticeship training, you get £1.10.

You will be able to access your funds through the Apprenticeship Service Account.

Funds in your account, and funding provided by the government through co-investment, can only be used towards the costs of apprenticeship training and end point assessment. This must be with an approved training provider and assessment organisation. It can’t be used on other costs associated with your apprentices or wider training effort. For example wages, statutory licences to practise, travel and subsidiary costs, managerial costs, traineeships, work placement programmes or the costs of setting up an apprenticeship programme.

If their recruitment agency pays the employer NI contribution then you will not pay the levy on their pay.

Yes, providing it is relevant to their role and will allow them to progress.

Funds will be valid 18 months from the time they appear in the account, after which, they will expire.

You will still be required to pay the Apprenticeship levy.

During the first year, no. You will only be able to use funds in your digital account to pay for the training and assessment of your own employees. The government is currently seeking views on proposals to allow employers to transfer 10% of their funds to another employer’s account from 2018.

Some employers may pay the levy in some months but not others, even if their annual pay bill turns out to be less than £3 million.

The PAYE system will ensure that employers pay the correct amount of levy for the tax year. This would involve an in-year repayment by allowing the employer to make a reduction in their other PAYE payments.