Apprenticeship levy takes effect

Implementation date: 6 April 2017

The Income Tax (Pay As You Earn) (Amendment) Regulations 2017 (SI 201/414) introduce an apprenticeship levy on large employers in all industry sectors for the purpose of raising money to meet the cost of apprenticeship training in the UK. Large employers will have to commit to spending 0.5% of their wage bill, based on total employee earnings, excluding payments such as benefits in kind, which will be collected via PAYE. Employers will receive an allowance of £15,000 to offset against the payment of the levy, which means that only employers with pay bills of more than £3 million will have to pay.

Legislation for the collection of the apprenticeship levy was introduced in the Finance Act 2016. Guidance is available to help interpret the specific details of the requirement. Technical guidance has also been published setting out how funding will work.