How do I calculate Apprenticeship Levy in accordance with HMRC Legislation?



1517. How do I calculate Apprenticeship Levy in accordance with HMRC Legislation?


A) Apprenticeship Allowance Allocation As per HMRC guidelines, companies or charities within a group may distribute the Apprenticeship Allowance among the group. Users can specify the allocated allowance amount under Chart of Setup -> Apprenticeship Levy Setup. Should a value of zero or no value be entered, the system will default to the standard rates (£15,000 and 0.5%) for the calculation. B) Levy Payment Threshold Only employers with an annual pay bill exceeding £3 million are required to pay the levy. The company in question has an annual bill of £2,980,796, which falls just below this threshold. As a result, the total Apprenticeship Levy due is less than the allowable threshold of £15,000, meaning no levy is payable. For reference, here is the relevant HMRC guidance: Apprenticeship Levy Calculation C) Levy Calculation Details Below are the levy calculation details for the company based on HMRC guidelines: Month 1 Cumulative Pay Bill: £245,655.69 Levy Calculated: £245,655.69 x 0.5% = £1,228.28 Cumulative Levy Allowance (Month 1): £15,000 ÷ 12 = £1,250 Levy Due: No levy is due, as the calculated levy (£1,228.28) is less than the cumulative allowance (£1,250). Month 2 Cumulative Pay Bill: £525,505.83 Levy Calculated: £525,505.83 x 0.5% = £2,627.53 Cumulative Levy Allowance (Month 2): 2 x (£15,000 ÷ 12) = £2,500 Levy Due: £2,627.53 - £2,500 = £127.53 Levy Payable for Month 2: £127 (rounded down) Month 3 Cumulative Pay Bill: £760,598.75 Levy Calculated: £760,598.75 x 0.5% = £3,802.99 Cumulative Levy Allowance (Month 3): 3 x (£15,000 ÷ 12) = £3,750 Levy Due: £3,802.99 - £3,750 = £52.99 Levy Payable for Month 3: £52.99 - £127.53 = -£74 (rounded down) The calculations follow this pattern for subsequent months