Are your payroll systems set up for the Levy before 6th April 2017?

Most businesses will have heard about the Apprenticeship Levy – but did you know that it is accounted for via the payroll system and that you may have to ensure that your payroll software is set up correctly to collect the correct Levy payments from 6th April 2017?

Here are some key points:

  • The Apprenticeship Levy has a £15,000 exemption which means that the Levy is payable by companies who have a pay bill of more than £3m per annum (the exemption of £15,000 is the first £3m pay bill x 0.5%)
  • However, the £15,000 exemption is “shared” amongst groups or connected companies – so if you have, or represent, a group of companies or “connected” companies with more than one payroll, then the £15,000 exemption which applies to the first £3m of pay bill allocated across the companies in the group (or which are connected)
  • Your payroll system set up needs to be checked to ensure that it is correctly allocating only one £15,000 exemption across the group or connected companies – if you fail to set this up correctly you will be likely to be applying a £15,000 exemption to each company or PAYE scheme you have
  • You need to ensure that your systems also are allocating the Levy exemption in a way which means you will be able to recover it if you provide qualifying training to your staff
  • If you do not operate the Apprenticeship Levy correctly (and so, for example, you fail to report it when it is due because your payroll systems are incorrectly claiming a £15,000 exemption in multiple companies in your group) – then HMRC can penalise you from April 2017

We can assist you to ensure that your payroll is properly configured to collect the correct Apprenticeship Levy payments from 6th April 2017.  There are also a wide range of training courses which will be able to be funded using your Apprenticeship Levy payments from April 2017.

If you do have to make Apprenticeship Levy payments, we can also advise you how to register your Levy funding account so that you can use your Levy payments to fund a range of training for your business.

For further information, please contact Clair Williams.