Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Apprenticeship Levy Manual

Apprenticeship Levy Allowance: levy allowance shared across PAYE schemes

Draft Regulation 147F Income Tax (Pay As You Earn) Regulations 2016

If an employer has more than one PAYE scheme, they can share the allowance across these PAYE schemes in a way that suits them best, by notifying HMRC of the split with their first return of Apprenticeship Levy, which will usually be at the beginning of the tax year. Employers will do this using the Employer Payment Summary (EPS).

For example – A single employer has a regular pay bill of £300,000 each month (£3.6m for the tax year), but operates 2 PAYE schemes, with a pay bill of £3 million on one PAYE scheme and £600,000 on another PAYE scheme. The employer decides to use the full Apprenticeship Levy allowance of £15,000 against the PAYE scheme with the pay bill of £3 million. The result is the PAYE scheme utilising the levy allowance, does not have to pay any levy, but the PAYE scheme with the £600,000 pay bill will have a levy liability of £600,000 x 0.5% = £3,000.

Alternatively, a single employer that has a regular pay bill of £300,000 each month (£3.6m for the tax year), but operates 2 PAYE schemes, with a pay bill of £150,000 on both PAYE schemes, may choose to share the £15,000 levy allowance equally between the 2 PAYE schemes, so both have a levy allowance of £7,500 for the year.

An employer may split the £15,000 levy allowance, in any way they choose. It does not necessarily need to be an even split as illustrated in the example above. Once an employer has decided on the split, that split cannot be changed for the remainder of the tax year, unless the split has been inputted incorrectly.