Levy consultation kicks off

The Government has launched a consultation on changes to the operation of the apprenticeship levy ahead of its introduction in April 2017.

The modifications to the connected rules introduced for the apprenticeship levy set out that, though a connected group is able to receive the same amount of allowance as a single employer, that allowance can be split between the connected employers in a way that those employers think is best, as long as the split does not mean that more than £15,000 is applied.

In addition there is a change to Draft Regulations 147D, which has been brought about in response to feedback, to make the pay bill reporting threshold clearer where there is a group of companies/charities. New regulation 147D(2)(b)(ii) has the effect of saying where in a group one of the members has a levy allowance allocated to them of for example £7,500, they will incur a levy liability once their pay bill exceeds £1.5m.

The draft regulations make clear that employers not subject to the connected rules, with a pay bill of over £3m will have to report and pay the apprenticeship levy. Employers with a pay bill of less than £3m for the previous tax year or who believe their pay bill will be less than £3m in the current year (unless they find otherwise), subject to the rules on connection, will not have to engage with the apprenticeship levy.

The increase in the reporting threshold from £2.8m to £3m for the preceding years pay bill, is a change made following feedback from the technical consultation on the initial draft regulations which was held in September 2016

More details on the consultation, which ends on 3 February 2017, can be found here.