The government has set a target of creating 3 million apprenticeships by 2020.
In order to achieve this target they are introducing the Apprenticeship Levy.
The levy is a compulsory tax for UK employers which will fund new apprenticeships.
Every employer with a wage bill over £3 million per year is required to pay the levy.
Your wage bill is made up of the total amount of your employees’ earnings that are subject to Class 1 National Insurance contributions, such as:
- pension contributions
If your wage bill does exceed £3m per year then your levy will be set at 0.5% of that wage bill.
The levy will be paid directly to HMRC through the Pay as You Earn (PAYE) process.