Registration open for online Apprenticeship Levy service

Employers affected by the introduction of the apprenticeship levy will have to register online to manage their schemes, on a new web portal set up by the Department for Education and the Skills Funding Agency (SFA) prior to the launch of the apprenticeship levy on 6 April 2017

The apprenticeship service is an online digital system (similar to online banking) that has been set up to support the apprenticeship levy.

The levy will require employers, with a salary bill of over £3m a year, to pay 0.5% of their total salary bill into the apprenticeship service, part of the government’s efforts to encourage investment in apprentices.

The online service allows affected employers to financially manage their apprenticeship programme and estimate their annual spend, as well as recruit apprentices through their training providers.

To register for the apprenticeship levy, employers need to have:

  • Government Gateway login details for PAYE schemes they want to include; and
  • details for each organisation that will be making an agreement with a training provider for apprenticeship training, including Companies House or charity number.

What is the apprenticeship levy?

Consisting of a 0.5% tax on UK employers with payroll costs in excess of £3m, according to the government the apprenticeship levy will only be payable by around 2% of UK businesses. It will take effect from 6 April 2017.

All employers will fall within the regime, but a £15,000 allowance is available each year, meaning the levy should only be due where payroll costs exceed £3m.

The draft legislation concerning how payments will be made is subject to a consultation period which closes on 3 February. As things stand affected employers across England, Scotland and Wales will pay the levy through their existing PAYE system and report the amounts due though the monthly Employer Payment Summary.

Stephen Hemmings, corporate tax partner at Menzies warned: ‘Employers will need to report these details to HMRC from the start of the tax year, if their previous tax year’s pay bill was more than £3m or they expect it to be this year.

‘Similarly, if their annual pay bill unexpectedly increases to more than £3m during the year they will then need to start reporting at the point that they realise this. A £1,250 allowance will be available each month, with employers paying more tax when spikes in the pay bill are experienced. The levy payment will be deductible for corporation tax purposes.

Sue Husband, director of the National Apprenticeship Service said: ‘The apprenticeship levy will come into effect in April 2017 to put apprenticeship funding on a sustainable footing and fund growth in the apprenticeship programme.

‘Employers have told us that they want to be in control of their apprenticeship programme and funding. They want to manage it quickly and easily, so we have designed the apprenticeship service to do just that.’

Further information

To register to manage your apprenticeship funds, go to DfE guidance here

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