Apprenticeship levy legislation published in draft

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The Government has published draft legislation on the introduction of the apprenticeship levy. The draft confirms that from April 2017, employers with a wage bill of more than £3 million will have to pay a 0.5% levy to fund apprenticeships. The Government announced its proposals in last year’s Autumn Statement with the hope it will help create three million more apprenticeships during the rest of this parliament. The legislation will be introduced in Finance Bill 2016, and the apprenticeship levy will be payable through Pay As You Earn (PAYE), alongside income tax and National Insurance. The calculation of the tax will be based on the same total employee earnings figure as the one that is used for class 1 national insurance contributions. Employers will receive a £15,000 allowance to offset the payment of the levy, which will be paid in vouchers. There will also be a connected persons' rule, similar to the employment allowance connected persons rule, so employers who operate multiple payrolls will only be able to claim one allowance. The Government estimates that the apprenticeship levy will be paid by less than 2% of UK employers. In its policy paper introducing the draft legislation, it said: “For employers paying the levy, the measure is expected to have som