Apprenticeship levy update for “connected businesses”

The much publicised apprenticeship levy has had an update after the Government last week announced a change regarding ‘connected’ companies which, in relation to the levy, means a company that is ‘connected’ to another company because one company controls another, or the same person or persons has control of both companies.

The apprenticeship levy is due to be launched in April 2017 and employers whose pay bill exceeds £3million per year will be subject to a 0.5% charge of the total wage bill.  The company will also receive a £15,000 levy allowance to offset against the monthly levy payment.

Initially, ‘connected’ companies could only have one company in their group receive the whole £15,000 allowance.  After consideration however, this has now been amended so ‘connected’ employers can distribute their allowance between the companies, not just limit it to one.  The distribution of the allowance must be agreed at the beginning of the tax year, and will not be able to be amended during the year.

Each employer will then calculate their levy payments in the same way but just subtract their own allocation of the allowance, which may change whether they are liable to pay the levy.  In order to be considered as an individual company, each ‘connected’ company must be an employer of staff in its own right.

The apprenticeship levy is just part of the changes that are being implemented across the landscape of apprenticeships as the government work towards their target to achieve 3 million new apprentice starts by 2020.  The focus is for apprentices to be more led by employers; the best people who know what is needed from apprentices to help them and their businesses thrive.  It’s because of this initiatives such as the Institute for Apprenticeships has been introduced.

Aspire Training Team work with employers across the South to help them find quality apprentices in childcare, business administration and health & social care.  If you’re interested in hiring an apprentice you can contact the team on 01202 551553 or email





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