Payroll Help
The apprenticeship levy is calculated when the Payroll - P32 Processing form is opened after the pay bill is calculated as normal in the Payroll Calculation command.
The levy is shown in the Appr. Levy column on the Payroll - P32 Processing form and is deducted from the total amount to be paid to HMRC.
The levy applies to all UK employers with a Class 1 secondary NICs liability and with a pay bill over £3 million each year. The levy will be charged at 0.5% of the annual pay bill.
The levy allowance is worth £1250 per month, £15,000 for each tax year. Companies with multiple PAYE schemes can share the allowance across their schemes. The details will be included in the Employer Payment Summary (EPS) if the levy had been due at any time during the tax year.
The levy should be paid in full for the tax month together with the payment for tax, NI and student loans (HMRC guidance).
The levy is calculated on a monthly cumulative basis and paid for in each tax month. Any unused allowance will be carried over to the next month. An unusual pay bill ‘spike’ in a month could mean that the levy is paid - even though the eventual annual pay bill is less than £3 million. It is then reclaimed in future tax months.
Tip: For more information, please visit www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work.