From April 2017, businesses will be required to pay the new Apprenticeship Levy – a duty introduced by the government to improve the quantity and quality of apprenticeship schemes. A 0.5% duty will be applicable to every business, but there will be a £15,000 allowance. Therefore, businesses will only be required to pay an Apprenticeship Levy when their annual payroll is over £3,000,000.
Recruitment agencies could potentially find themselves with an Apprenticeship Levy costing thousands of pounds. Contractors on the payroll of an agency will contribute towards the agencies annual salary expense and could heavily impact the total duty owed.
The Apprenticeship Levy could potentially cost your recruitment agency thousands of pounds. Keep reading to see an example.
Recruitment agencies A, B, C and D all have fifty internal employees with an average salary of £35,000. The number of contractors on each of their payroll varies, resulting in each agency owing a different Apprenticeship Levy. Recruitment agency D has no contractors on its payroll and because their own annual salary expense is less than £3,000,000, they are the only agency in the example who are exempt from paying the Apprenticeship Levy.
Once you have declared your levy to HMRC, “you will be able to access funding for apprenticeships through a new digital apprenticeship service account” (HMRC). Therefore, hiring an apprentice may be an ideal solution for your business and will ensure you get a return on your levy payments.
Regarding the levy itself, it may be more cost effective for your business to pay your candidates directly via their own Personal Service Company (PSC) because this way they will not be on your payroll. The same applies if you outsource your payroll requirements to an umbrella company, such as Churchill Knight Umbrella.
Churchill Knight and all of our associated companies* are proudly accredited by the Freelancer & Contractor Services Association (FCSA). The FCSA is a leading professional body that is committed to ensuring the supply chain of temporary workers is ethical and compliant with HMRC rules and regulations. To achieve this prestigious accreditation, all of our companies have undergone comprehensive audits by independent employment and legal professionals.
FCSA accreditation says it all – its members are compliant, ethical and have both your agencies and your candidates’ best interests at heart. Every business under the Churchill Knight Group falls into this category.
Click on the button below to download a PDF version of our Apprenticeship Levy Guide – written exclusively for recruitment professionals.
To schedule a meeting at your office, or to find out more information about Churchill Knight and how we can help your recruitment agency remain compliant, please use the form below, or call 0808 2525533.
We’re delighted to work with hundreds of recruitment agencies throughout the UK. By partnering with us, you’re teaming up with an accountancy and umbrella company with over 20 years’ experience, and a proven track record. We’ve built a reputation we’re proud of, and you can be assured that your recruitment agency, consultants and candidates will become our priority.
Here are a few reasons why you should contact our friendly team today to arrange a meeting in your office:
- We make it our priority to stay up to date with the latest news and legislation affecting the supply of temporary workers. Some of the legislation can be complex (especially IR35), and as a result, our Agency Development Team would be happy to deliver training at your office for Consultants who want to find out more.
- We are partnered with IR35 specialists that can help your end-client, and your agency with IR35 assessments, Status Determination Statements, and more.
- Churchill Knight has over 20 years’ experience, and we’re proud of the reputation we’ve built.
- All your candidates’ payroll requirements are covered – limited company, umbrella, and more. Switching between our services is easy.
- We understand no recruitment agency is the same. This is why we tailor our partnerships, ensuring your agency gets what it wants from our professional relationship.
- Your candidates are your priority and we respect this. You have our word – they’ll become our priority too. We always go the extra mile to ensure the service we deliver is beyond their expectations.
- We acknowledge it’s our responsibility to always be up to date with the latest legislation and to share it with our partners. We frequently run free seminars for our partners and are happy to host training sessions in their offices. If this is something that sounds appealing, please get in contact with us.