South West businesses have today been advised to have a 'robust' system in place in preparation for the upcoming Apprenticeship Levy.

From next Thursday, around 1,500 businesses across the region will be required to pay the levy into a digital account through the pay-as-you-earn (PAYE) process.

Joanne Webber (pictured), employer solutions director at accountants RSM in Bristol, said the new levy would transform how apprenticeship training was funded and delivered.

The levy applies to companies with annual pay bills more than £3million or those who are connected to other companies with a combined wage bill in excess of £3million.

Joanne Webber said: "With implementation now imminent, businesses need to be ready to apply and administer the new rules.

'It will be important to establish a robust system for doing so to take into account factors, such as pay rises, bonuses and national insurance contributions for employees turning 25 - this will enable a business to accurately calculate the levy charge.

"HMRC will monitor compliance via employers' tax returns, and anti-avoidance provisions and penalties will be applied for late payment, reporting errors and not keeping adequate records.

'Also, if employers don't currently offer apprentice training then they need to implement measures to deliver this and recruit from the existing talent pool or appoint new apprentices.

"The funds will expire after 24 months so if the money is not invested in apprenticeship training it will be lost, so businesses need to ensure they maximise the benefits of the scheme or else they could miss out.'

The levy is calculated on the entire pay bill at a rate of 0.5 per cent minus a levy allowance of £15,000.

Employers will be able to use digital vouchers to invest in existing and new talent to upskill their workforce.

Employers that pay the apprenticeship levy in England will also receive a 10 per cent top-up from the Government to their total monthly contributions.

It means that for every £1 an employer pays in, they can draw down £1.10 to spend on apprenticeship training through their apprenticeship account.

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