Government issues draft apprentice levy legislation
A charge on large employers to fund three million apprenticeship schemes will be 0.5% of payroll costs and paid annually through their payroll, the government has confirmed.
Confirmation of the apprenticeship levy's detail, which starts in April 2017 and is intended to fund three million apprenticeships, comes after requests from business, including the ICAEW, for more information on the scheme to help employers prepare for it.
A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3m. Less than 2% of UK employers will pay the levy which will start on 6 April 2017, HMRC said.
Using an allowance rather than excluding employers based on the number of employees will avoid "cliff edges" in the system, and reduce the burden on employers, it added.
The government has published draft legislation, information on who it will affect and its expected benefits.
A consultation last year on the levy found that employers wanted "early clarity on the rate and scope of the levy, and a simple system for paying it once it is implemented," HMRC said.
HMRC said that the levy is expected to support productivity growth through increased training. Although it may have a "near-term impact in reducing earnings growth", the government said that it expected that the levy will increase businesses' profits and wages over the long-term.