Deputy Director Employer Relations · National Apprenticeship Service Reporting and paying the Levy •They believe their annual pay bill will be over £3 million in the tax year

Are you ready for the levy?Karen WoodwardDeputy Director Employer Relations

National Apprenticeship Service

Apprenticeships Reform Update

National Apprenticeship ServiceNational Apprenticeship Service

The impact

The opportunity


The impact

The opportunity


The impact

The opportunity

– Replace apprenticeship frameworks by 2020

– New Institute for Apprenticeships

– Same legal protection to degrees

– Apprenticeship target for public sector bodies

– Secondary Class 1 NICs abolished for apprentices under 25

Underpinned by apprenticeship levy and

digital apprenticeship service


Key features:

Apprenticeship levy


Non levy payers and co-Investment

Two types of employers:

1. Employers who haven’t paid the levy

2. A levy-paying employer with insufficient funds

Government will pay 90%

Employer will pay 10%


HMRC Update


Employer Journey

Employer

identifies if

paybill over

£3m

Employer

allocates £15,000

allowance across

PAYE schemes

Employer

calculates

levy due

Employer

reports and

pays levy due to

HMRC along

with other PAYE

liabilities

Employer

accesses

apprenticeship

funding via

digital

apprenticeship

service

(If employers are

connected, the pay

bill will be £3 million

across the group)


What counts as your paybill?

Pay Bill

Total amount of employee earnings that are subject to Class 1 National Insurance contributions

Employees earnings include. .

Wages

Bonuses

Commissions

Pension ContributionsUnder 21

Apprentices under 25


What does not count as your pay bill?

Pay Bill

Total amount of employee earnings that are subject to Class 1 National Insurance contributions

Employees earnings does not include. .

Under 16

Not subject to

NIC

Benefits in Kind (class

1a)

Employees abroad (no UK Class 1 liability)


Apprenticeship Annual Levy Allowance

1. Every employer, subject to the rules on connection, has an annual allowance of £15,000 per

year to offset against their levy liability

2. If they have more than one PAYE scheme, they can share the allowance across these PAYE

schemes in a way that suits them best

3. They do not need to apply for the allowance, 1/12 is offset against their monthly levy liability

on a cumulative basis across the year

4. This means that where the full £15,000 allowance is not shared, there is a monthly levy

allowance of £1,250 to use to reduce their monthly levy liability

£1,250 £1,250 £1,250


Connected Employers

– An employer that is connected to other employers by virtue of connected companies or

charities rules, they only have one £15,000 allowance for all employers within the group

– Employers can decide how to share the annual allowance between them

£15,000 to share between

them


Reporting and paying the Levy

• They believe their annual pay bill will be over £3 million in the tax year 2017/18; or

• The levy allowance has been shared across a group of companies or charities and the share of their allowance is such that they know they will have a levy liability

• They must report their levy due each month

• They need to report into HMRC within 14 days after the end of each tax month and once they start reporting this they must continue to do so until the end of the tax year

• Employers must pay the levy each month at the same time as they pay tax and any earnings-related contributions

• This must be paid within 17 days after the end of the tax month if they pay by an approved method of electronic communication

Employers must

report their levy

liability to

HMRC if . .

If employers

are liable to

report & pay

the

Apprenticeshi

p levy . .

Paying

the

levy . .


Paying the levy

– Employers pay their levy to HMRC, through the PAYE process

– Single employers with multiple PAYE schemes will only have one allowance.

– Connected employers share one allowance

Employer of 250 employees, each with a

gross salary of £20,000.

Pay bill: 250 x £20,000 = £5,000,000

Levy sum: 0.5% x £5,000,000 = £25,000

Allowance: £25,000 - £15,000 =

£10,000 annual levy payment

Employer of 100 employees, each with a

gross salary of £20,000.

Pay bill: 100 x £20,000 = £2,000,000

Levy sum: 0.5% x £2,000,000 = £10,000

Allowance: £10,000 - £15,000 =

£0 annual levy payment

LEVY PAYING EMPLOYER NON-LEVY PAYING EMPLOYER


Paying the Levy

Regular Pay bill of £300k per month:

The organisation pays £250 each month in levy which

totals £3000 over the year.


Digital apprenticeship service


What is the digital apprenticeship service?The digital apprenticeship service is made up of several functions:

Find

apprenticeship

training

Find

assessment

organisations

Find a

standard or

framework

Find a training

provider

Estimate my

apprenticeship

funding

1 2

Development

Available

Manage

apprenticeships

RegisterPay my

provider

3\4

140Find an

apprenticeshipRecruit an

apprentice

For training

providersFor employers

5


Manage apprenticeships

Employers will be able to:

– negotiate and pay for apprenticeship

training and assessment

– manage their funding and apprentices,

view their account balance and plan

their spending

– stop or pause payments

Red and White Holdings PLC


Manage apprenticeships

Registering for a digital account

What you will need:

– User to set the account up

– Government Gateway login details for

the PAYE schemes you want to include

in your account

– Organisations companies house or

charity number (if you have one)


Key milestonesPlease note that all dates are provisional and are subject to change.

2017

January Final Funding Rules to be published

February Service open for early registration

March National Apprenticeship Week (6 to 10 March)

RoATP published

April Levy collected

May Service live

Make commitments (apprenticeship starts)

To 2020 All employers to use the service


For more information search for ‘apprenticeships’ or ‘traineeships’ on GOV.UK

Skills Funding Agency Digital Blog https://sfadigital.blog.gov.uk/

Set up web alerts from GOV.UK

Contact us:

By phone: 0800 015 0600

By email: [email protected]

Available : 8am – 8pm Monday to Friday (Core team)

8am – 10pm Monday to Friday (Helpdesk)

Information and support


Where to go for further information

For more information on paying the levy: https://www.gov.uk/guidance/pay-apprenticeship-levy

For more information on accessing levy funds: https://www.gov.uk/government/publications/apprenticeship-

levy-how-it-will-work/apprenticeships-levy-how-it-will-work

HMRC December Employer Bulletin: https://www/gov/uk/government/publications/employer-bulletin-

December-2016

HMRC General queries: 0300 200 3200

Textphone: 0300 200 3212

Fax: 03000 523 030

SFA Business Bulletin: ww.gov.uk/government/publications/employer-bulletin-december-2016

SFA Digital Blog https://sfadigital.blog.gov.uk/category/digital-apprenticeship-service/

Documents

Deputy Director Employer Relations · National Apprenticeship Service Reporting and paying the Levy •They believe their annual pay bill will be over £3 million in the tax year