Apprenticeship Levy Technical Consultation on the draft regulations

28 September 2016

28 September 2016

The draft regulations make clear that only where an employer has or expects to have a levy liability will they have to engage in the reporting of the Apprenticeship Levey to HMRC.

Employers with a paybill of £2.8 million or less in the previous tax year and who believe that their pay bill will be less than £3 million in the current year (2017 – 2018) will not have to engage with the Apprenticeship Levy.

In brief the draft regulations:

  • Set out that an employer is required to assess their annual pay bill amount for the previous and current tax year to decide if they are liable for the levy (as above).
  • Make provision for the due date of the Apprenticeship Levy to be by the 19th (or 22nd if you pay by an approved method electronic communications) following the tax month was calculated.
  • Place a requirement on employers to notify HMRC of the levy which is to be paid and make provision for the information which should be included in this return - the employer will use the Employers Payment Summary (EPS) to report their Apprenticeship Levy liability due to date and also the amount of annual levy allowance the employer may allocate to multiple PAYE references.
  • Set out how to calculate the monthly levy allowance on a cumulative basis, in order to calculate levy liability - they also set out how to calculate levy liability both in the first month of the tax year, and in subsequent months.
  • Allow both single and employers who are part of a group (Company unit or Charity unit, which has apportioned the £15,000 annual levy allowance across the unit) to apportion the annual levy allowance between multiple PAYE schemes.
  • Make provision for recovery of overpaid levy by the employer – which will require the employer to first offset apprenticeship levy overpaid against any amount of which the employer is liable to pay under the Income Tax (Pay As You Earn) (Amendment) Regulations 2017 before making a claim to HMRC for a refund of any balance owing.

As you would expect in a technical consultation on Draft Regulations there are two consultation questions broached which are:

  1. Do the regulations as drafted achieve their objectives as set out ?
  2. Do these draft regulations produce any unintended consequences?
Any comments to the draft regulations should be sent by no later than 14 November 2016 [email protected].