Process and submit the apprenticeship levy

Solution Properties

Solution ID:

200427112355598

Last Modified Date:

Wed Sep 04 15:10:42 UTC 2024

Taxonomy Path:

Case category//How do I...//governmental/legislative compliance

Author:

[email protected]

Process and submit the apprenticeship levy

Description

If your annual pay bill exceeds £3 million, you're required to pay 0.5% of it into the apprenticeship levy. You have an allowance of up to £15,000 to offset against this. Any apprenticeship values are submitted to HMRC via the employer payment summary each period.

If you want to wait until you reach the annual threshold before Sage 50 Payroll calculates the apprenticeship levy, you can defer this until the annual threshold is reached >

Click Company, then Legislation.
Click the NI tab.
Click Edit beside Apprenticeship Levy Settings.
Select the checkbox beside Defer calculation until annual threshold is reached.
Click OK, then OK.

TIP: If you're part of a group of connected companies, with separate data for each company, you can Split the apprenticeship levy across multiple companies.

Moved software provider

If you have moved from another software provider mid-year and/or manually entered YTD values, the values for apprenticeship levy displayed on reports such as the P32 won't reconcile correctly. We would recommend the following:

Calculate the values manually, outside of the software, from the mid-year point.
Or, rollback and reprocess the payroll from start of the tax year and the software will calculate these values automatically.

NOTE: The annual pay bill is all payments to employees that are subject to employer Class 1 secondary National Insurance contributions. E.g. wages, bonuses, commission. Find out more on Gov.uk (new tab)

Cause

Resolution

Watch the video

Check the apprenticeship levy liability

Check the apprenticeship levy liability on the P32 report >

Click Tasks then Period End.
Click P32 Report and enter the range of tax months to include.
Click OK then click OK.
In box 18, check the Apprenticeship Levy value.

If there's a value in box 18, you must Submit an Employer Payment Summary (EPS) to notify HMRC of your apprenticeship levy liability.

You can also check your apprenticeship levy liability within HMRC Payments >

Click Company then click Settings.
Click HMRC Payments.
Check your Apprenticeship Levy values.

These values are generated automatically when you run your P32 report.

TIP: To enter these figures manually, e.g. if you've been processing in other payroll software during the tax year, select the I want to enter these values manually check box.

If you use Collector of Taxes, you can include your apprenticeship levy liability in the payment file that you upload to HMRC. Find out more in our handy Set up and use Collector of Taxes to pay HMRC electronically guide.

Calculate the apprenticeship levy liability

The calculation for the apprenticeship levy liability is >

(Applicable Gross for NIC To Date x 0.5%) - Apprenticeship levy allowance To Date = Apprenticeship levy liability To Date.
TIP: An easy way to multiply by 0.5% is to multiply by the Gross for NIC by 0.005.

Apprenticeship Levy Liability To Date - Apprenticeship Levy liability already paid = Apprenticeship Levy liability This Period.

Sage 50 Payroll calculates the Apprenticeship Levy automatically and shows the relevant values in figure 18 on your P32 - Employer Payment Record.
Apprenticeship Levy is always calculated on a cumulative basis, similar to PAYE.
Not all earnings are included in the Apprenticeship Levy calculation. Find out the Earnings included in the apprenticeship levy liability calculation.
Check the applicable Gross for NIC by downloading the Payment Summary History Part 2 - By Date (Inc. Gross for NIC) from our Standard Report Library
To calculate the Apprenticeship Levy allowance to date, divide your annual Apprenticeship Levy allowance by 12, then multiply this by the number of tax months already processed in the year so far. View example >
The default Apprenticeship Levy allowance is £15,000. To reconcile your Apprenticeship Levy in month 3, you would calculate the Apprenticeship Levy Allowance by doing: (15,000 / 12) x 3 = £3750.

NOTE: If you split your Apprenticeship Levy across multiple companies, your annual allowance figure may be different. Read our handy Split the apprenticeship levy across multiple companies guide to find out more.

Reconcile your apprenticeship levy

For the steps to reconcile the Apprenticeship Levy, visit our earnings included in the apprenticeship levy liability calculation guide.

Submit your apprenticeship levy liability

Submit an Employer Payment Summary (EPS) to let HMRC know the value of your apprenticeship levy liability:

Click e-Submissions then click Employer Payment Summary.
Select You are adjusting your payment to HMRC because: You are reporting Apprenticeship Levy.
Click Next then click Next.
Ensure the statutory values are correct then click Next.
Enter any CIS deductions suffered year to date then click Next.
The Apprenticeship Levy year to date and the annual Apprenticeship Levy Allowance values appear.
Click Next then click Finish to submit the EPS.

Next steps

If you use the nominal accounts link in Sage 50 Payroll to post salary journals to accounts, the apprenticeship levy value isn't included. To reconcile your accounts, post a manual journal to record the apprenticeship levy. Use our How to record a salary journal guide to do this.

[BCB:92:Limitless - 50 Payroll - Reconcile Reports:ECB]

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