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Are you ready for the apprenticeship levy?
The apprenticeship levy will be 0.5% of an employer’s pay bill, subject to secondary Class 1 NICs, but each employer will receive an annual allowance of £15,000 to offset against their levy liability. This means that only employers with annual pay bills greater than £3 million will be required to report and pay any levy.
All guidance relating to this is subject to parliamentary approval of the legislation in the 2016 Finance Bill. Further guidance for employers will be available later in the year.
The levy will be payable through Pay As You Earn, alongside income tax and National Insurance contributions (NICs), and reported on the Employer Payment Summary (EPS).
To keep the process as simple as possible, an employer’s ‘pay bill’ will be based on the total employee earnings subject to Class 1 secondary NICs, including all earnings below the Secondary Threshold.
If you are in any doubt about your position in relation to this issue, please talk to your usual Thomas Croft contact as soon as possible.