Apprenticeship Levy

In the 2015 Autumn Statement, George Osborne announced a new Apprenticeship Levy for employers to help fund employer apprenticeship schemes and reach the target of delivering three million apprenticeships by 2020. The Levy was introduced in May 2017.

As an employer you will be required to pay the Apprenticeship Levy each month from 6 April 2017. If you:

  • have an annual pay bill of more than £3 million
  • are connected to other companies or charities for Employment Allowance which in total have an annual pay bill of more than £3 million

Your annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions (NICs) such as wages, bonuses and commissions. You must include payments to:

  • all employees earning below the Lower Earnings Limit and the Secondary Threshold
  • employees under the age of 21
  • apprentices under the age of 25

Your pay bill doesn’t include:

  • earnings of employees under the age of 16
  • earnings of employees who aren’t subject to UK NICs legislation
  • earnings on which Class 1A NICs are payable, such as benefits in kind

More information on the Apprenticeship Levy can be found on the Gov.uk website:

https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work#pay-apprenticeship-levy