The apprenticeship levy is a tax that is payable by employers to HMRC to fund apprenticeship training. If you are liable to pay the apprenticeship levy, you need to go to Payroll Settings > Business Settings > HMRC Settings.
You will then be taken to the following screen:
You will need to scroll down to the apprenticeship levy section. Here you will need to fill in:
- Are you required to pay the apprenticeship levy? Please select yes or no
- Apprenticeship levy allowance: Enter the apprenticeship levy allowance here.
- Have you reported apprenticeship levy amounts for this financial year using other software? Please select yes or no. If you have please enter any previous levy amounts you have paid and the allowance that has been used so far in the boxes that will appear when you select yes.
Scroll down to the bottom of the screen and press 'Save' once you have completed all the other sections on the screen.
P32 Report
- Go to Reports > HMRC Reporting > P32 Report.
When you are on the P32 report you will see there are sub heading tabs within the report. To see the Apprenticeship Levy details you need to select the Apprenticeship Levy tab.
You will see that the columns shown are:
- Tax Month: The month that the Levy applies to.
- Total Payroll Bill: The total amount of all earnings that the employer is due to pay class 1 NI on.
- Apprenticeship Levy: The amount of Apprenticeship Levy fund.
- Apprenticeship Levy Allowance: The total allowance to be deducted.
- Net Apprenticeship Levy: This is the total amount that the employer will pay and will be reported in the P32.
For more information on the P32 report, click here.
Apprenticeship levy exemption
If you have any employees who are on the National Insurance Category X (under 16 years of age) and you want their earnings to be exempt from the Apprenticeship Levy calculations, go to the employee's Tax and NI Details page and tick the box underneath the NI category:
This box is also present on the Employee Wizard and the Employee Import.
Once the box has been ticked, all earnings in future pay runs for this employee will be exempt. If you require the past pay runs to be exempt, then you will need to unlock the pay runs, then add the tick box to the employee, then finalise the pay runs.