West businesses urged to take advantage of Apprenticeship Levy opportunties

Joanne Webber

On 6 April 2016, around 1,500 businesses across the south west will be required to pay the apprenticeship levy into a digital account through the pay as you earn (PAYE) process.

The levy applies to companies with annual pay bills over £3m or those who are connected to other companies with a combined wage bill in excess of £3m.

The levy is calculated on the entire pay bill at a rate of 0.5 per cent minus a levy allowance of £15,000. Employers across the south west will be able to use the digital vouchers to invest in existing and new talent to upskill their workforce.

The additional overhead, or tax, for businesses may not be welcomed by all. However, it does present an opportunity to invest in local talent and tackle any skills gaps in order to help stimulate growth across the region.

Joanne Webber, employer solutions director at RSM in Bristol, said: ‘It will be important to establish a robust system for doing so to take into account factors, such as pay rises, bonuses and national insurance contributions for employees turning 25 – this will enable a business to accurately calculate the levy charge. HMRC will monitor compliance via employers’ tax returns, and anti-avoidance provisions and penalties will be applied for late payment, reporting errors and not keeping adequate records.

“Also, if employers don’t currently offer apprentice training then they need to implement measures to deliver this and recruit from the existing talent pool or appoint new apprentices. The funds will expire after 24 months so if the money is not invested in apprenticeship training it will be lost, so businesses need to ensure they maximise the benefits of the scheme or else they could miss out.”