With the levy at 0.5% of the gross annual pay bill, employers have an allowance of £15,000.
The annual fee for an employer with a wage bill of £10 million will look like this:
£10 million x 0.5% – £15,000 – £35,000
The levy allowance is conducted on a monthly basis and will accrue over the year. Employers have an allowance of £1,250 every month; if the allowance for the month is not used, it will be carried over to the next month.
The HMRC collects the total levy amount on a monthly basis. The funding for training apprentices can be accessed by employers via a digital account. Should an employer not spend the allocated levy amount on apprenticeships, the money will then be assigned to other employers within the scheme.
If your company is part of a group, then you must choose how the levy allowance is going to be allocated to the individual companies. All decisions must be made at the start of the tax year and will be set for the whole year. Every employer within the group must calculate their payments using the methods listed above while utilising their portion of the £15,000 levy allowance.
Payments to the HMRC under the apprenticeship levy are viewed as an acceptable deduction for Corporation Tax.