Set up a digital account for Levy payments to be paid to. You can do this at https://www.gov.uk/guidance/pay-apprenticeship-levy
What is The Levy?
The Levy is a compulsory payroll tax for UK employers which will fund new apprenticeships from April 2017. Employers who have a PAYE of £3 million or more will be required to contribute towards the Levy, managed directly by the HMRC. Employers will now be able to choose the training they would like new and existing staff to undertake and which approved training provider they would like to have manage their training need.
Benefits to you
There are many reasons that your business should recruit an apprentice, in fact, almost all employers (96%) who have taken on an apprentice have seen many benefits and added value to their business.
- 72% of business report improved productivity as a result of employing an apprentice.
- 75% of employers say their apprenticeship programme has helped cut recruitment costs.
- 80% state apprenticeships will play a greater role in future recruitment, leading to reduced staff turnover, fewer skills-related vacancies and lower recruitment costs.
- 81% of consumers prefer companies that take on apprentices, so you may also notice an improved brand image and greater customer satisfaction.
Example 1 – Someone required to pay the Levy
An employer with an annual pay bill of £5,000,000
Levy sum: 0.5% x %5,000,000 = £25,000 subcontracting levy allowance: £25,000 – £15,000 = £10,000 annual levy payment.
Example 2 – An employer who will NOT need to pay the Levy
An employer with an annual pay bill of £2,000,000
Levy sum: 0.5% x £2,000,000 = £10,000 subcontracting levy allowance: £10,000 – £15,000 = £0 annual levy payment.