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HMRC internal manual

Apprenticeship Levy Manual

Paying and reporting the levy: reporting the levy liability

Regulation 147D Income Tax (Pay As You Earn) Regulations 2003

Employers must report their levy liability to HMRC if:

  • their pay bill in the preceding tax year was over £3 million
  • they consider they will have a levy liability during the current tax year i.e. they believe their annual pay bill will be over £3 million in the tax year
  • the levy allowance has been shared across a group of companies or charities and the share of their allowance is such that they know they will have a liability to pay the levy

Employers must report their levy each month on the Employer Payment Summary (EPS). Levy payers must send the EPS to HMRC within 14 days after the end of each tax month. If an employer is not a levy payer then there is no change to the way in which they use the EPS. If an employer does not use an EPS or their payroll software doesn’t have EPS functionality, they can use HMRC’s Basic PAYE Tools to calculate and report their levy liability.

Due to the cumulative nature of the Levy Allowance, once an employer starts reporting the Apprenticeship Levy, they must continue to report every month until the end of the tax year.

Employers should monitor their pay bill throughout the tax year in case their pay bill increases and they become liable to report and pay the levy during the tax year.

Employers should provide the following information using the EPS:

  • the tax year to which their return of Apprenticeship Levy relates
  • their HMRC office number
  • the PAYE reference to which their return of Apprenticeship Levy relates
  • their accounts office reference
  • the total amount of annual levy allowance which they have allocated to the PAYE reference
  • the amount of levy liability due to date
  • the tax month to which the EPS return relates