Apprenticeship Levy Allocation between group

Apprenticeship Levy Allocation between group companies

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On hold to HMRC with an estimated queue of over 30 mins.  We have several companies within a group and allocated 20/21 £15k allowance between them.   It turns out that not all the allowance was used by two of the companies but reading HMRC we can't transfer the unused allowance to the other companies so the allowance is lost.  Not sure if I am reading it right - you can if they were the same employer with several PAYE schemes but not if the employers are separate companies.  Need to know if this is correct before we allocate  21/22.  Does anyone have any experience of this or suggestions on how to allocate the allowance?

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By Hugo Fair
14th May 2021 17:43

Good timing ... updated today at https://www.gov.uk/guidance/pay-apprenticeship-levy

"Your Apprenticeship Levy allowance of £15,000 can be divided between:
* all your PAYE schemes
* your connected companies or charities
You can decide how to split the allowance between your PAYE schemes or with your connected companies or charities. You must report how you’ve divided your allowance the first time you have to pay Apprenticeship Levy. You cannot change your share of the allowance during the tax year."
"You can decide how you divided your levy allowance across your connected companies or charities at the start of the next tax year.
You cannot change where the allowance has been divided across connected companies or charities at the end of the tax year."

However:
"Employers with multiple PAYE schemes who do not use their full Apprenticeship Levy allowance during the year, can change how this has been divided at the end of the tax year. This can be done to offset any unused allowance against another of your schemes."

So my reading is you're half correct ... in that you can re-allocate to another PAYE scheme (within group of connected companies), but not to other employers (within the group) if they share the same PAYE scheme.

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Replying to Hugo Fair:
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By kathyk0410
14th May 2021 18:25

It's been a long week. HMRC couldn't answer the question and referred me to the Apprenticeship service who is having difficulties with its telephone system. My reading was the complete opposite which doesn't really make any sense. I will look at it in the morning - just got a few more Furlough claims to file before 12am. Thanks as ever for your response.

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Replying to kathyk0410:
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By Hugo Fair
14th May 2021 19:02

It's always dangerous trying to interpret HMRC guidance at 6:00pm on a Friday - especially when it's as fuzzy as this particular set!

On re-reading it, I have changed my mind slightly ... I now think it says:
1. You can decide on the allocation of the AL allowance (across the PAYE schemes of your connected companies or charities) at the start of each tax year.
2. Once you have decided/reported that allocation, it cannot be varied during that tax year ...
. .. EXCEPT where this results in the full AL allowance not being used at the end of the tax year, AND where there are multiple PAYE schemes (one or more of which could 'absorb' the remaining balance).
In this last scenario, it suggests you CAN re-allocate (but only at year end) ... without describing the mechanism for doing so!

I fear you may yet have to try contacting the Apprenticeship service on Monday!

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By Tax Dragon
16th May 2021 07:29

FWIW my reading is that the unused allowance is not lost - as Hugo says, it is reallocated. So... it's worth that phone call to find out how.

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