Employers with annual pay bills of over £3 million will have to pay a 0.5% levy of their wage bill into apprentices and training for their business.
An annual levy allowance of £15,000 will also be available to each employer to offset against their liability although companies under common control may have to share this annual levy allowance.
Research by City & Guilds found that the majority of employers (87%) are having trouble recruiting the right staff while 33% who are eligible to pay the levy are still not aware of the coming changes.
Paying the levy
From April 2017, eligible businesses will have to report the amount due to HMRC.
The levy must be reported on the Employer Payment Summary within 14 days after the end of each tax month, so for example the first report will be due on 19 May 2017.
Reporting must continue until the end of the tax year, even if your bill reduces and you no longer have any levy to pay.
The apprenticeship levy should be paid at the same time as your monthly PAYE payment.