Policy News Journal - 2016-17

The Chartered Institute of Payroll Professionals ……………………………………………………………Policy News Journal

What the UK Government announcement did not make clear was that this is not £221 million of additional money for Scotland, but largely replaces what the Scottish Government would have previously received as a traditional share existing UK Departmental apprenticeship spend. As in previous years the Scottish Government will use this funding, as part of the overall Scottish Budget, to support their extensive skills, training and employment provision, including their Modern Apprenticeship programme. In direct response to the views of employers in Scotland, and reflecting on the Apprenticeship Levy consultation responses received, the Scottish Government will deliver a range of interventions that further support skills, training and employment in Scotland. In particular they will:  support measures to tackle structural unemployment issues and challenge inequalities and under- representation in the labour market by supporting people who face barriers to education, training or employment, in partnership with employers, local authorities and the third sector;  continue with the implementation of the Youth Employment Strategy: ‘Developing the Young Workforce’ specifically including the development of the network of Developing the Young Workforce Regional Groups and the delivery of employment-focused college provision for young people; and  respond to the immediate skills needs of employers, through: o the establishment of a new Flexible Workforce Development Fund; and o on-going and sector-specific skills support for priority sectors in the economy such as digital, care and early years.

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Apprenticeship levy guidance update 2 February 2017

Guidance on how to pay the apprenticeship levy has been updated with additional information to explain how to apply the levy in specific sectors.


Franchises with an annual pay bill of over £3 million (including any connected companies or charities) will have to pay the levy. You’ll have an annual allowance of £15,000 for all of the franchises under your control. You can choose to share the allowance across the franchises you control or across your PAYE schemes.

Off-payroll working in the public sector

Payments from a public sector employer to a personal service company, a partnership or other individual which are subject to off-payroll working reforms must be included in the public sector employer’s pay bill. This is because the public sector employer will be liable to pay the Class 1 NICs for workers engaged through such intermediaries from April 2017.

These changes don’t apply for services provided through intermediaries such as a personal service company to clients in the private sector.

Short-lived companies

Short lived companies such as special purpose vehicles will have to pay the levy if they’re liable for Class 1 secondary NICs. You’ll have a full £15,000 allowance if the special purpose vehicle has been set up part way through the tax year. You’ll have to check whether you’re connected to another company or charity at the start of the following tax year.

Managed service companies

If you’re a managed service company you’ll have to pay the levy if you have an annual pay bill of over £3 million. If you’re connected to another employer, you may have to pay the levy if your pay bill is less than £3 million.

Employment or recruitment agencies


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