Apprenticeship Levy draft legislation

05 February 2016

Draft legislation has been published introducing the new Apprenticeship Levy which will have effect from 6 April 2017.

It will be a Levy on employers to fund new apprenticeships. Legislation will be introduced in Finance Bill 2016 and will provide for a levy to be charged on employers’ paybills at a rate of 0.5%. The levy will be payable through Pay As You Earn (PAYE) and will be payable alongside income tax and National Insurance. The “paybill” will be based on total employee earnings subject to Class 1 secondary NICs.

Each employer will receive one annual allowance of £15,000 to offset against their levy payment, which will mean the Levy will be payable on pay bills in excess of £3 million a year. There will be a connected persons rule, similar the Employment Allowance connected persons rule, so employers who operate multiple payrolls will only be able to claim one allowance.

A Tax Information and Impact Note (TIIN) has also been published alongside an explanatory note.

Any comments on the draft legislation should be received by 2 March 2016.

CIPP comment

Given the short time scale for comments if you have anything you would like fed back on the draft legislation, please email policy by 26 February and we shall collate and submit on your behalf. Thank you.

Consultation responses