The government created the Apprenticeship Levy in April 2017 to support apprenticeship programmes throughout the UK by enabling companies to recoup a portion of the costs associated with teaching apprentices.
The charge is a small tax levy paid by all companies with an annual wage spend of more than £3 million. The tax is 0.5 per cent of the gross payroll of the business.
In addition to income tax and National Insurance, it is paid to HMRC. If several firms join a group, the total payroll is used to calculate the charge – this prevents corporations from dividing into numerous smaller companies with wage bills below £3m to avoid paying the levy.