Apprenticeship Levy
| Taxation in the United Kingdom |
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| UK Government Departments |
| UK Government |
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| Scottish Government |
| Welsh Government |
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The Apprenticeship Levy is a UK business levy which is used to fund apprenticeship training. In the current (2017/18) tax year it is paid by employers with an annual pay bill of more than £3 million.
History
The Apprenticeship Levy was announced by Chancellor of the Exchequer George Osborne in the July 2015 budget which was held following that year's General Election.[1] It was subsequently incorporated into law by Part 6 of the Finance Act 2016.[2] and came into effect at the start of the 2017/18 UK tax year on 6th April 2017. It was projected to raise £2.675 billion in its first year of operation.[3]
Operation
The Apprenticeship Levy is paid by employers with annual pay bills in excess of £3 million. In this context, the pay bill is defined as the earnings liable to class 1 secondary National Insurance contributions. The levy is payable at 0.5% of the total paybill (i.e. not just the element over £3 million) minus an annual "levy allowance" of £15,000.[4]
The levy due by an employer is paid to HMRC through the Pay-as-you-earn (PAYE) process alongside payment of Income Tax and National Insurance contributions.[5]
The use of the levy for funding apprenticeships which commence after 1 May 2017 is the responsibility of the Department for Education and the Skills Funding Agency in England. There are separate arrangements in Scotland, Wales and Northern Ireland, since apprenticeships are a devolved policy.[6]
References
- ^ HMRC, Chancellor George Osborne's Summer Budget 2015 speech, accessed 4 July 2017
- ^ "Finance Act 2016, Part 6". Legislation.gov.uk. UK government. Retrieved 4 July 2017.
- ^ "Information on Apprenticeship Levy" (PDF). UK Department for Education. Retrieved 4 July 2017.
- ^ HMRC, Apprenticeship Levy - guidance for software developers, updated 9 September 2016, accessed 4 July 2017
- ^ BPP University/BPP Professional Education, Employer Guide: Apprenticeship Levy Key Facts, October 2016 update, accessed 10 December 2016
- ^ Department for Education, Apprenticeship Funding, updated 12 August 2016, accessed 10 December 2016