Despite the fact that the apprenticeship levy was introduced more than six months ago, almost a quarter (23%) of business who are paying the fee admit that they have absolutely no understanding of how it works.
What’s more, 56% of the 1,400 firms who were surveyed by the British Chambers of Commerce (BCC) said that they do not expect to recover their payment, despite the fact that they receive an annual allowance to offset against the bill.
What is the apprenticeship levy?
As of the 6th of April 2017, employers with an annual wage bill of more than £3 million must pay a levy towards apprenticeship funding. This levy is charged at 0.5% of your annual wage bill.
Every employer does however receive an annual allowance of £15,000 to offset against their levy payment. 66% of businesses polled either did not take any action to access the funds or knew nothing about the apprenticeship levy however.
Jane Gratton, head of business environment and skills at the BCC, said:
“Firms need greater flexibility on how they can use their levy payment and access to a system that is fully operational as quickly as possible, is simple and efficient and enables them to access good quality training.”
If you would like help calculating your annual allowance, please contact us about our accountancy services and we can help.
Paying the levy
If you have to pay the apprenticeship levy, you will need to report the amount due to HMRC.
Reporting is completed monthly using the Employment Payment Summary, which includes the annual allowance allocated to the PAYE scheme and amount of levy owed to date.
You also need to hold records of information used to calculate your levy payment for at least three years after the tax year it relates to.
If you need help with any aspect of the apprenticeship levy, please feel free to contact PKB about our accountancy services and we will be more than happy to help.