Apprenticeship Levy

The Apprentice Levy is changing in 2025. The exact changes are still to be confirmed, but expect to see a rebrand to the Growth and Skills Levy. It is also expected that the range of training programmes that can be levy funded will expand and that access to levy funds for small business will improve.

At present no changes have been announced in regard to employers that must pay the levy so any employers with an annual payroll bill of more than £3m must pay the levy. The £3m threshold applies to employees that are subject to Employer Class 1 Secondary National Insurance contributions. Connected companies and charities must also be taking into account when making the calculation. However, the following are excluded from the £3m calculation:

• Earnings for any employee under the age of 16;
• Earnings for any employee who is not subject to UK NIC legislation; and
• Earnings on which Class 1A NICs are payable, such as benefits in kind.

There are special rules for certain sectors including franchises, off payroll workers, short-lived companies, managed service companies, employment of recruitment agencies, joint ventures and schools.

The Apprenticeship Levy is charged at 0.5% of your annual pay bill, on a monthly basis, and is shown on your P32 report each month. You also receive an Apprenticeship Levy Allowance of £15,000 each tax year to offset against any levy payable. However, if your business is connected to other businesses, then you will need to decide if this allowance is to be distributed across all or some of your connected businesses, or just used against one.

Again, we have attached more information regarding the Apprenticeship Levy, and would appreciate it if you would complete this form and return it to us as soon as possible. Should you have any queries regarding the above, please do not hesitate to contact us at payroll@cliveowen.com.