25 April 2016 Julia Ascott, Employment Taxes Specialist
BIS has just published guidance on how the Apprenticeship Levy will work. This guidance concentrates on how the levy will be collected and how it will be distributed into employers’ digital accounts, rather than what employers can spend it on. The main funding guidance will cover the latter point, with a draft expected in June, and then further drafts in October with final guidance not available until December.
However, in the meantime this guidance covers a number of points, some of which we already knew and some which are useful new clarifications. It confirms that the levy will be paid via the PAYE process, but also clarifies that levy payments are allowable for Corporation Tax. It provides information regarding 10% top up funding which will be available and the need to utilise all your levy funding in your digital account in order to benefit from this. It also states that funds in your levy account will be available to use for 18 months before they expire, and covers how to pool funds within a corporate group. Usefully, it also confirms that employers can apply to be an approved training provider to provide apprenticeship training for their own employees, and it makes clear that levy funds can’t be used for apprenticeship training started before 1 April 2017.