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UK Government Launches Apprenticeship Levy Consultation

by Jason Gorringe, Tax-News.com, London

16 December 2016


The UK Government has launched a consultation on changes to the operation of the apprenticeship levy ahead of its introduction in April 2017.

The levy will be charged at a rate of 0.5 percent of an employer's pay bill. Employers will receive an annual allowance of GBP15,000 to offset against their levy payment and this means that employers not subject to the rules around connection will only pay the levy if their pay bill exceeds GBP3m (USD3.74m) in a given year.

The modifications to the connected rules introduced for the apprenticeship levy set out that, though a connected group is able to receive the same amount of allowance as a single employer, that allowance can be split between the connected employers in a way that those employers think is best, as long as the split does not mean that more than GBP15,000 is applied.

In addition there is a change to Draft Regulations 147D, in response to feedback, to make the pay bill reporting threshold clearer where there is a group of companies/charities. New regulation 147D(2)(b)(ii) has the effect of saying where in a group one of the members has a levy allowance allocated to them of for example GBP7,500, they will incur a levy liability once their pay bill exceeds GBP1.5m.

The Apprenticeship Levy was first announced in the 2015 Budget as a way of funding new apprenticeships.

TAGS: individuals | tax | business | employees | corporation tax | United Kingdom | legislation | individual income tax

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