HMRC investigations into Apprenticeship Levy fees double

The number of investigations launched by HM Revenue & Customs into the underpayment of the Apprenticeship Levy has more than doubled in a year.

According to data obtained by accountancy group UHY Hacker Young, the figures reveal underpayments increased to 84, from 33 in 2017/18. HMRC collected an additional £6.2m through these investigations last year, up from £5.2m in 2017/18.

Under the Apprenticeship Levy, any business with an annual payroll of more than £3m is required to pay 0.5% of its total wage bill – minus a £15k allowance – into a pool, which it can then draw on, to fund approved training schemes.

Commenting on the figures, UHY Hacker Young partner Clive Gawthorpe says: “The fiendishly complex Apprenticeship Levy is clearly causing problems for businesses.

“The increase in investigations suggests that HMRC focused on larger businesses initially as the value of potential underpayment was higher and is now widening its net to smaller businesses too.

“We have seen additional problems arise amongst large businesses where several different parts of the same businesses group may be liable to pay the Levy. However, there is little guidance to help businesses calculate their liabilities.

“The high number of investigations HMRC is launching into underpayment is a symptom of the wider problems that are hampering the scheme’s effectiveness. These urgently need addressing.”

Responding to the figures, an HMRC spokesperson said: “The levy helps to deliver new apprenticeships and supports quality training by putting employers at the centre of the system. Employers who are committed to training are able to get back more than they put in by training sufficient numbers of apprentices.

“Initially, HMRC allowed time for employers to meet with their obligations in respect of the new levy and issued reminders as to those obligations. Using data from the first full year that the levy had been in operation for, HMRC was able to gain a better understanding of compliance and focus more resource to interventions accordingly.”

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