Apprenticeship Funding And Levy
commuting costs. New regulations in force from January 2011 require that where such sacrifices are in place that the worker is still in receipt of national minimum wage, and from April 2016 the national living wage. If any taxable non-cash benefits or expenses are provided to the worker a P11D or P9D must be completed at the end of the tax year. Recent case law also shows that such salary sacrifice arrangements which seek to change the tax treatment of travel and subsistence costs do not work for tax purposes and in one case a significant settlement was made with HMRC. In addition, the new rules for tax relief on travel and subsistence introduced on 6 April 2016 specifically exclude salary sacrifice arrangements when determining what tax relief would apply to travel and subsistence costs. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS APPRENTICESHIP FUNDING AND LEVY From April 2017 a new method of funding apprenticeships came into force, in England alone, and with it a new cost to employers across the whole of the UK, called the Apprenticeship Levy. In England alone funding is self-managed and drawn by employers from a fund into which they pay their levy and into which an additional 10% is paid by HMRC. Employers select the training provider and approve the sums to be drawn by that provider in relation to that employer’s apprentices. Employers have 24 months from the time a levy payment is made into the apprenticeship account to use the funds for apprenticeship training before the unused funds become available for non-levy paying employers. In Scotland, Northern Ireland and Wales apprenticeship funding remains centrally accessed by training providers, though the money to pay for it will come from the levy itself. Allocation of the funding is based on the employee’s address. The levy is calculated by the employer at a rate of 0.5% of the employer’s total national insurable pay each pay period, and on a cumulative basis. Once the levy is established the employer is then permitted to use an allowance of £15,000 a year, also used per pay period, against the levy in order to calculate the amount, if any, to be paid into the apprenticeship account. Employers within any kind of group structure, which can include public sector bodies, are permitted to use only one allowance for the entire group and this must be split by whatever method the group decides. Unused allowance at the end of the year may be reallocated to other members of the group and this will be useful to groups where the paybill fluctuates. Payment of the levy is made by those employers affected along with the normal PAYE liabilities which are due and in the normal timescales. Payment must be made by the 22nd of the month following the establishment that a levy exists and is added to the other PAYE liabilities. Should the employer be eligible to make payment quarterly, which can occur if there is no, or very little, allowance available to offset, can make payment quarterly, by the 22nd of the month following the end of the PAYE quarter. (See PART1, Quarterly Payment of PAYE for more information.) No printing, copying or reproduction permitted. HMRC guidance on payment of the levy does not allow for quarterly payment. The guidance makes it clear that this must be paid across monthly; however, on the rare occasions that a levy is due from such an employer the second condition, that it must be paid “in the same way you pay Income Tax or National Insurance contributions”, suggests that it is possible to make the payment quarterly.
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