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Levy Paying Employers with a pay bill of over £3million

The Apprenticeship Levy will be paid by employers with a pay bill of over £3 million from 6 April 2017.

Each month, levy paying Employers transfer 0.5% of their pay bill into their digital account, part of the new digital apprenticeship service. They will also benefit from a 10% top up to their monthly funds which will be entered into their digital account. These funds can then be accessed to spend on apprenticeship training within their organisation. Funds in the digital account will first appear by the end of May 2017.

The funds expire 24 months after they appear in the digital account if they are not used for apprenticeship training (this applies to both the 0.5% levy and the10% top up) and the oldest funds in the account will always be used first.

Employers will negotiate the cost of training with their training provider within the funding caps set for each of the apprenticeship standards/frameworks.

If a levy paying employer wishes to train an apprentice but does not have enough in the digital account they would have to contribute 10% to the training costs and the government would invest the remaining amount.

Calculate the Levy you will pay using the Government's calculator.

LevyPayingExample    NonLevyPaying

Levy Allowance

The levy allowance will operate on a monthly basis, accumulating throughout the year.

Monthly Levy Allowance

Employer with Levy liability in month 1 of £1,000

Monthly Levy Allowance:
£1,000 - £1,250 = (£250)

£250 will be carried forward to the next month and the employer would not be liable to pay the levy in month 1, therefore making the levy allowance for month 2 at £1,500.

How to calculate net costs to your business

When calculating net costs to your business of the levy, take account of:

  • The levy allowance of £15,000 per tax year
  • The 10% top-up payments applied monthly
  • NI savings that come into effect from April 2016 related to apprentices under the age of 25
  • Employer incentives for apprentices aged 16-18
  • Funding caps applied to the apprenticeship standards relevant to your apprentice programmes.

For further information or to discuss your requirements, contact Uxbridge College Employer Services on: 

01895 853786 | 01895 853780 
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