HMRC is consulting until 14 November 2016 on the first set of draft regulations for the apprenticeship levy, covering calculation, payment and reporting through PAYE (see www.bit.ly/2cMUewF). The regulations make it clear that only where an employer has a levy liability, or expects to have a levy liability during the tax year, will they need to engage with reporting to HMRC. Employers whose pay bill was £2.8m or less for the previous tax year, or estimated at less than £3m for the current year, will not have to report. However, the British Chambers of Commerce (BCC) is concerned that too many businesses are still unclear about the levy, due to be introduced in April 2017, and the government’s funding reforms.
The regulations set out the following key points:
employers are required to assess their annual pay bill amount for the previous and current tax year to decide if they are liable for the levy;
the due date will be the 19th (or 22nd if you report electronically) of the following month;
employers are required to notify HMRC of the levy which is to be paid and make provision for the information to be included in this return, using the employer’s payment summary to report the liability due to date and also the amount of annual levy allowance the employer may allocate to multiple PAYE references;
the annual levy allowance will be allocated on a monthly cumulative basis, in order to calculate levy liability;
both single employers and those who are part of a group (a company unit or charity unit, which has apportioned the £15,000 annual levy allowance across the unit) will be allowed to apportion the annual levy allowance between multiple PAYE schemes; and
employers must recover any overpaid levy first by set-off, then by claiming a refund.
A further set of draft regulations will be published later in the year, covering assessment, repayment, recovery from third parties and record-keeping.
The British Chambers of Commerce (BCC) carried out a survey of over 1,600 businesses in August. This showed that around 39% of those surveyed have no understanding, or even knowledge, of the levy. Around 30% of medium-sized businesses (employing between 50-249 staff) expect to have to pay the levy. 51% of businesses don’t understand how the funding reforms work above or below the £3m pay bill threshold. Only 11% say reforms will increase their recruitment of apprentices, while just 5% say they will have a positive impact on their wider training budget.
Marcus Mason, head of education and skills at the BCC, commented, ‘The government needs to ensure that businesses understand how they could benefit from the reforms, because if it just feels like yet another tax then then the policy will have failed. Devolved administrations also need to provide a guarantee that the money raised is ring-fenced and kept for training’.
HMRC is consulting until 14 November 2016 on the first set of draft regulations for the apprenticeship levy, covering calculation, payment and reporting through PAYE (see www.bit.ly/2cMUewF). The regulations make it clear that only where an employer has a levy liability, or expects to have a levy liability during the tax year, will they need to engage with reporting to HMRC. Employers whose pay bill was £2.8m or less for the previous tax year, or estimated at less than £3m for the current year, will not have to report. However, the British Chambers of Commerce (BCC) is concerned that too many businesses are still unclear about the levy, due to be introduced in April 2017, and the government’s funding reforms.
The regulations set out the following key points:
employers are required to assess their annual pay bill amount for the previous and current tax year to decide if they are liable for the levy;
the due date will be the 19th (or 22nd if you report electronically) of the following month;
employers are required to notify HMRC of the levy which is to be paid and make provision for the information to be included in this return, using the employer’s payment summary to report the liability due to date and also the amount of annual levy allowance the employer may allocate to multiple PAYE references;
the annual levy allowance will be allocated on a monthly cumulative basis, in order to calculate levy liability;
both single employers and those who are part of a group (a company unit or charity unit, which has apportioned the £15,000 annual levy allowance across the unit) will be allowed to apportion the annual levy allowance between multiple PAYE schemes; and
employers must recover any overpaid levy first by set-off, then by claiming a refund.
A further set of draft regulations will be published later in the year, covering assessment, repayment, recovery from third parties and record-keeping.
The British Chambers of Commerce (BCC) carried out a survey of over 1,600 businesses in August. This showed that around 39% of those surveyed have no understanding, or even knowledge, of the levy. Around 30% of medium-sized businesses (employing between 50-249 staff) expect to have to pay the levy. 51% of businesses don’t understand how the funding reforms work above or below the £3m pay bill threshold. Only 11% say reforms will increase their recruitment of apprentices, while just 5% say they will have a positive impact on their wider training budget.
Marcus Mason, head of education and skills at the BCC, commented, ‘The government needs to ensure that businesses understand how they could benefit from the reforms, because if it just feels like yet another tax then then the policy will have failed. Devolved administrations also need to provide a guarantee that the money raised is ring-fenced and kept for training’.
