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HMRC internal manual

Apprenticeship Levy Manual

Specific sectors and employees: government departments and their agencies

Government departments with an annual pay bill of over £3 million will have a liability to pay the levy. 

Whether or not a government agency (for example HM Prison Service, Legal Aid Agency) has a liability to pay the levy and therefore its own allowance will depend on whether it is an employer in its own right distinct from that of its parent department (i.e. the Ministry of Justice in the case of the agencies named above). It will be an employer for the purposes of the levy if it has a liability to pay Class 1 secondary NICs on the earnings of its employees. Where the agency is not an employer in its own right, the parent department will include the earnings of the agency in its pay bill for the purposes of calculating its levy liability.