This is now imminent, the draft legislation is undergoing final consultation and will take effect from 6 April 2017.

Employers will have to pay the apprenticeship levy if:

• They are liable for employers' secondary Class 1 National Insurance Contributions in a tax year (even if the applicable rate is 0% e.g. because a worker is aged under 21 or is an apprentice aged under 25); and
• Their total "pay bill" exceeded £3million in the previous tax year and/or is expected to reach £3million in the current tax year.

The rate of the levy will be 0.5% of the total pay bill for a tax year less an annual allowance of £15,000 (£1,250 pcm) that may be offset against it. This means that in practice the levy will be payable only on pay bills of over £3million. The government says that this will be less than 2% of employers.

From 6 April 2017, if an employer's pay bill has exceeded £3million in the preceeding tax year or is expected to exceed £3million in the current tax year they must notify HMRC of this and calculate the levy payable. The levy will be paid on a monthly basis at the same time as PAYE payments.

What about group companies? The levy will apply to "connected companies", which will apply to group companies and means that the pay bill for each connected company must be added together and the allowance of £15,000 may only be offset against the total (or shared amongst the connected companies).

Companies paying the levy will be able to access funding to pay for apprenticeship training from approved organisations.