U.K. Clarifies Apprenticeship Levy Regulations

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By Jared Mondschein

July 26—Employers likely would need to submit reports on apprenticeship levy obligations starting in 2017 if their annual employee payroll amounts were greater than 2.8 million pounds ($3.67 million) the previous tax year, the U.K. HM Revenue & Customs (HMRC) said June 8.

Under legislation still subject to parliamentary approval as part of Finance Bill 2016, U.K. employers with annual payroll amounts of at least 3 million pounds ($3.94 million) would be subject to a 0.5 percent payroll tax to fund a new government apprenticeship program starting April 6, 2017. A threshold for reporting on levy obligations has not yet been set by the HMRC.

The new threshold for reporting on the levy obligations was proposed June 8 at a meeting of the Employment and Payroll Group, a forum at which HMRC representatives meet quarterly to discuss payroll and employment tax issues with members of the payroll and employment communities.

The 2.8 million pound threshold “is still being worked up” and the HMRC “would welcome comment” on it, the HMRC representatives said.

The HMRC representatives also said that earnings by employees younger than 21 and apprentices younger that 25 should be included in the calculation of total annual payroll.

To contact the reporter on this story: Jared Mondschein at jmondschein@bna.com

To contact the editor responsible for this story: Michael Trimarchi at mtrimarchi@bna.com

For More Information

The minutes from the June 8 Employment and Payroll Group meeting is available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/539656/Minutes_-_8_June_2016.pdf.

HMRC Guidance on the apprenticeship levy is available at https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work.

Finance Bill 2016 is available at http://services.parliament.uk/bills/2016-17/finance.html.

More information on payroll issues in the U.K. can be found in the U.K. country primer.

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