Apprenticeship Levy

Davidbyworth
Davidbyworth Registered Posts: 71
in General accounting discussion
Hi

Bit of a mental block at this end. What will the double entry be for an apprenticeship levy. The liability will sit on the accounts until paid later that month.

Comments

  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    Apprentice levy is effectively another type of employer's national insurance.

    However rather than the rate being 13.8% it is only 0.5%.

    So the double entry would be:
    DR Apprentice levy expense (this would be an expense account in the P&L just under employer's NI)
    CR PAYE
  • Davidbyworth
    Davidbyworth Registered Posts: 71
    Thanks that is a great help. And then this will clear under the PAYE payment through bank?
  • reader
    reader MAAT, AAT Licensed Accountant Posts: 1,037
    Davidbyworth said:

    Thanks that is a great help. And then this will clear under the PAYE payment through bank?

    Yes, the PAYE balance will clear to £nil when it is paid off by the 22nd of the following month.

    The payroll you are dealing with must to huge because the apprentice levy only kicks in when the wage bill is £3M+ per year
  • sheyla
    sheyla Registered Posts: 1
    Hi
    Following on this topic, although I know it is a bit old, I was wondering about the other side of the levy, when you take the funds. My understanding is that you should recognise the levy as a grant income at the same time as the related training expense, but would we need to recognise it in the balance sheet too? As deferred income perhaps?

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