Summary of Threat
The Apprenticeship Levy takes effect from April 2017
If you are subject to the new levy it will be charged at a rate of 0.5% of NI contributions
It will be in addition to, and not instead of the CITB levy!
Get the right advice & ensure you are protected
Speak To Colette
Specialist Construction Payroll Advisor
THREAT IN DETAIL
The Apprenticeship Levy takes effect from April 2017, and is part of Government’s plan to create an additional 3 million apprenticeships by 2020.
If you are subject to the new levy it will be charged at a rate of 0.5% of earnings that are subject to secondary Class 1 National Insurance Contributions (the pay bill). Whilst 0.5% doesn’t sound substantial, a large pay bill can accumulate a hefty levy, and could equate to up to a 9% reduction in profits (depending on your structure).
Each employer will receive an annual allowance of £15,000 to be offset against their levy payment, with HMRC regulating the assessment, payment, collection and recovery of payments, and will be collected by HMRC through RTI.
What is the solution?
By supplementing your employed workforce with self-employed tradesmen engaged through EEBS, you can both mitigate your exposure to the levy, and react to variations in workload in a more cost effective manner.