What Is The Apprenticeship Levy?

Shape Image One
What Is The Apprenticeship Levy?

Basically, the apprenticeship levy refers to a type of taxation. The purpose of this levy is to support companies so that they can offer more apprenticeships. The idea was to boost training and develop apprenticeship programs. Let’s find out more. 

An apprenticeship levy is a tax that employers are supposed to pay. This tax is used to create a fund that provides money to cover apprenticeship-training costs. Given below are the features of this tax:

  • Employers have to pay this monthly tax through PAYE
  • The rate of this tax is 0.5% of the total payroll of the employer 
  • This levy is used to provide funds to cover apprenticeship training costs 
  • Only employers with over £3 million of payroll have to pay this levy

The apprenticeship levy is a government scheme to provide funding for apprenticeship programs. According to the levy rules, if the payroll is over £3 million, the employer has to pay a levy of 0.5% on the total payroll. And a government allowance of £15,000 offsets it. The amount of levy is paid on a monthly basis via PAYE in addition to the national insurance contributions and income tax. 

Levy’s contributions show up in an account that employers can use to pay for the training. According to the rules, employers can use these funds to pay for apprenticeship training only. 

After two years, the unused funds reach the expiry date and go back to the government. Non-levy paying employers may cover 5% of the course cost and the rest of 95% will be on the government

The apprenticeship levy is beneficial for businesses. Plus, it can help provide financial support for the training and development of apprenticeship programs. 

Author

Leave a Reply

Your email address will not be published. Required fields are marked *