Apprenticeship levy to be based on Ni’able pay

On 4th February the government published some further details about how the apprenticeship levy, to be introduced on 6th April 2017, will work in practice. It will be based on a calculation of 0.5% of Ni’able pay for employers (one assumes that means PAYE schemes) with Ni’able pay of £3 million, minus an allowance of £15,000.

It is not clear if the figure will vary each pay period based on Ni’able pay, but with eligibility to pay the levy based on the total prior year, if the Ni’able pay is more than £3m, or an estimate of Ni’able pay for the tax year. What is definite is that it is to be paid over with HMRC remittances.

Let’s hope there is urgent and thorough consultation with stakeholders on this significant cost burden for large employers that has again fallen to be administered by payroll professionals on the basis of utilising the RTI system. This is concerning as the central HMRC systems are far from stable, particularly HMRC’s collection and correct application of tax, NI and student loan payments received from employers. This does not bode well for adding another statutory payment into the mix.

The guidance and draft regulations can be found here.