Apprenticeship Levy

Apprenticeship Levy Option

How do I apply Apprenticeship Levy Allowance? Which option should I choose?

During the process of moving your payroll from 2016/17 to 2017/18 tax year you will be prompted to select an apprenticeship levy allowance option. You will have 3 option to choose from:

  • Select maximum allowance (£15,000)
  • No allowance (£0.00)
  • Enter a reduced allowance for this company

Select maximum allowance (£15,000)

Most companies should select this option. This will claim all of the allowance on the single company.

No allowance (£0.00)

You should only select this option if the total £15,000 allowance has already been allocated elsewhere in related company/companies. Using this option will mean the company get no relief from the levy.

Enter a reduced allowance for this company

If you need to split the allowance across a group of related companies you should enter the amount of the allowance you wish to use for this part of the group. You must make sure the total does not exceed £15,000 across the group.

What value of apprenticeship levy allowance should I set?

1.The maximum level of apprenticeship levy allowance for 2017/2018 is £15,000

2.The levy allowance is on a per PAYE scheme basis i.e. £15,000 per PAYE Scheme

3.For a group of associated companies the levy allowance is £15,000 per group of companies. The levy can be split across multiple companies but the sum cannot exceed £15,000

Example 1

All employees in the PAYE scheme are contained in this payroll company and the PAYE Scheme is not part of a larger group.

Apprenticeship Levy allowance should be set to £15,000

Example 2

The PAYE scheme is split across multiple companies in this payroll system and it is not part of a larger group. Sum of pay bill does not exceed £3,000,000

Company A has an estimated Annual Pay bill per year of £1,000,000

Company B has an estimated Annual Pay bill per year of £1,000,000

In order to stop any apprenticeship levy being calculated the allowance is apportioned across the two companies.

Company A, Apprenticeship Levy allowance should be set to £7,500

Company B, Apprenticeship Levy allowance should be set to £7,500

Example 3

The PAYE scheme is split across multiple companies in this payroll system and it is not part of a larger group. Sum of pay bill does not exceed £3,000,000

Company A has an estimated Annual Pay bill per year of £2,000,000

Company B has an estimated Annual Pay bill per year of £800,000

Company C has an estimated Annual Pay bill per year of £200,000

In order to stop any apprenticeship levy being calculated the allowance is apportioned across the three companies.

Company A, Apprenticeship Levy allowance should be set to £10,000

Company B, Apprenticeship Levy allowance should be set to £4,000

Company C, Apprenticeship Levy allowance should be set to £1,000

Example 4

The PAYE scheme is split across multiple companies in this payroll system and it is not part of a larger group. Sum of pay bill exceeds £3,000,000

Company A has an estimated Annual Pay bill per year of £2,000,000

Company B has an estimated Annual Pay bill per year of £2,000,000

Company C has an estimated Annual Pay bill per year of £2,000,000

In order to calculate the correct apprenticeship levy the allowance is apportioned across the three companies.

Company A, Apprenticeship Levy allowance should be set to £5,000

Company B, Apprenticeship Levy allowance should be set to £5,000

Company C, Apprenticeship Levy allowance should be set to £5,000

Note: Since the pay bill of £3,000,000 is exceeded by adding Company A and Company B, the allowance could be apportioned as follows and the results would be the same

Company A, Apprenticeship Levy allowance should be set to £7,500

Company B, Apprenticeship Levy allowance should be set to £7,500

Company C, Apprenticeship Levy allowance should be set to £0

Example 5

The PAYE scheme is split across multiple companies in this payroll system and it is not part of a larger group. Sum of pay bill exceeds £3,000,000 in a single company

Company A has an estimated Annual Pay bill per year of £8,000,000

Company B has an estimated Annual Pay bill per year of £6,000,000

Company C has an estimated Annual Pay bill per year of £1,000,000

Note: In this example the full allowance will be used in Company A so there is no need to apportion the value. Company B and Company C can be set to zero

Company A, Apprenticeship Levy allowance should be set to £15,000

Company B, Apprenticeship Levy allowance should be set to £0

Company C, Apprenticeship Levy allowance should be set to £0

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