The payments are transferred to a fund which can then be used to pay for training and assessment of apprentices that work at least 50% of the time in England. It's possible to register at

In this context, the term 'connected' applies to any business which has common owners, is under common control or is on a corporate group. It can include sole traders, partnerships and limited liability partnerships, as well as limited companies.

Family-run companies are classed as connected when they depend on each other for administrative and/or financial support. The rules affect trustees and businesses owned by a trust and can also apply to schools and academies outside direct local authority control.

There is no exemption for people who already pay into an industry training levy agreement, such as the one that exists in the construction industry.

So what constitutes your annual payroll bill? Well, it includes all earnings that are subject to NI contributions, including wages, bonuses and commissions. Payments to employees below the lower earnings threshold, under the age of 21 and under the age of 25 need to be included in the total. The calculation of the payment should include any labour supplied to clients too.

Annual Allowance

Each group of connected employers is entitled to an annual allowance of £15,000. The allowance can be shared across the connected businesses, but only one allowance is available which is deducted from the levy.

Your cumulative apprenticeship levy - net of allowance - should be paid to HMRC as part of the monthly PAYE process.

We recommend the action to take is:

  • Establish whether you are required to pay the levy
  • Calculate and pay the levy
  • Make sure you keep records for at least three years after each tax year

This blog has been written by our Payroll Manager Lisa Goodwin. For further information please contact Lisa on 0161 475 1578.