U.K. Issues More Draft Legislation on Apprenticeship Payroll Tax

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By Jared Mondschein

Sept. 20—Draft legislation that addresses the calculation, payment and recovery of the Apprenticeship Levy, a new payroll tax, was issued for consultation Sept. 19 by the U.K. HM Revenue & Customs (HMRC).

The levy, already legislated in the Finance Bill 2016, would require employers with payrolls more than 3 million pounds ($3.9 million) to pay a 0.5 percent payroll tax starting April 6, 2017, to fund a new government apprenticeship program.

The draft legislation clarifies a number of technical issues related to the new payroll tax and stipulates that “only where an employer has a levy liability, or expects to have a levy liability during the tax year, they will need to engage with reporting the Apprenticeship Levy,” the HMRC said.

The draft legislation also details how the levy is to be reported through the Pay as You Earn process and confirms that the annual levy allowance of 15,000 pounds ($19,475) would operate on a monthly basis.

Remaining technical aspects of the levy, including assessment, repayment, recovery from third parties and records to be retained, is expected to be made public later this year, the HMRC said.

Comments on the draft legislation are due to the HMRC by Nov. 14, 2016.

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 draft legislation is available at https://www.gov.uk/government/publications/draft-legislation-regulations-for-the-calculation-payment-and-recovery-of-the-apprenticehip-levy.

More information on the Apprenticeship Levy is available at https://www.gov.uk/government/collections/apprenticeship-changes,

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

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