Levy payers
Hire an apprentice or upskill your staff with your Apprenticeship Levy
What is an Apprenticeship Levy?
The Apprenticeship Levy is a small tax levied on UK employers to fund new apprenticeships. As an employer, you have to pay Apprenticeship Levy each month if you:
• Have an annual pay bill of more than £3 million
• Are connected to any companies or charities for Employment Allowance purposes and have a combined annual pay bill of more than £3 million
How does the Apprenticeship Levy work?
The Apprenticeship Levy gets paid through PAYE, alongside a business’s usual tax and National Insurance payments. Once HMRC have received the Levy payment, it is set aside for the training of apprentices. The general idea is that companies who commit to training will get back more than they put in, if they train sufficient numbers of apprentices.
What is the Apprenticeship Levy allowance?
Each employer – including those with multiple payrolls – receives an annual allowance of £15,000. This is to offset against their Apprenticeship Levy payments.
Why £15,000? £15,000 is 0.5% (the portion of gross payroll that levied companies must pay to HMRC) of £3m (the ‘Levy-free’ wage bill threshold).
The Apprenticeship Levy doesn’t get paid on the first £3m of a company’s payroll. However, if the payroll of individual companies is linked by a group structure, the £15,000 allowance – or 0.5% of £3m – will only get applied once. Likewise, you cannot carry over any unused allowance into a new tax year.
