The Apprenticeship Levy
The Apprenticeship Levy was set up by the Government with the aim of funding three million apprenticeships in the UK by 2020. It affects all UK employers with a payroll bill in excess of £3m. Small and medium sized enterprises under this payroll bill threshold and who are non-levy paying employers will continue to be funded through provider allocations for the next few years. For Trailblazer apprenticeships, this will be done using the interim funding model.
Will this influence the CITB levy?
Yes, if you are a levy paying customer there will be an increase to how much you can claim. Geason Training can ensure your financial management of the levy will maximise all opportunities that are available via the CITB grant system.
If your PAYE is under £3m per annum and you don't contribute to the apprenticeship levy you will not see any changes to the CITB grant opportunities.
What counts as your payroll bill?
Your payroll bill will be based on the total amount of earnings subject to Class 1 secondary NICs. The earnings include any remuneration coming from employment, such as wages, bonuses, commissions, and pension contributions that you pay NICs on however this excludes benefits in kind.
How much will the levy be?
It will be set at a rate of 0.5% of the total payroll and will be collected monthly via PAYE. There will be a £15,000 fixed annual allowance for employers to offset against their levy payments. The levy allowance will operate on a monthly basis and will accumulate throughout the year. This means as an employer you will have an allowance of £1,250 a month. Any unused allowance will be carried from one month to the next. Where a group of employers are connected you will only be able to use one £15,000 allowance.