The Year of the Levy

13 Jan 2017

I closed last year’s posts with some helpful guidance from the Employment Appeal Tribunal on stress and disability. The sober reality of January prompts this reminder that the age of the levy is now upon us. In particular we can look forward to two new levies in April.

The Apprenticeship Levy will be taken from employers with a pay bill of more than £3 million per annum. For this purpose the payroll is assessed by reference to earnings which attract Class 1 NIC’s so it includes bonus, commission and pension contributions. The levy will be 0.5% of the pay bill subject to an allowance of £15,000pa and a generous portion of administration. As an aside, take care if you’re preparing an apprenticeship contract. They’re a tripartite legal hybrid between the apprentice, the training provider and the employer; I’ve seen several botched examples and none which acknowledge that a 16 or 17 year old apprentice is a minor.

The immigration levy (AKA the Immigration Skills Charge) will be imposed on employers who issue Certificates of Sponsorship to non-EU migrant workers. The charge will be £1,000 per annum per worker. There’ll be a reduced rate (£364) for small businesses and charities together with some exemptions, for example graduates switching from Tier 4 to Tier 2 will escape the levy. This levy will only be applied to new Certificates of Sponsorship so if you’re thinking of issuing a certificate it might be worth getting on with it sooner rather than later. It’s also worth noting that paying the Apprenticeship levy will not confer exemption from the immigration levy; which brings me to the remarks made by the Minister of State for Immigration on Wednesday.

Robert Goodwill MP said the immigration levy could be imposed on employers who recruit EU workers after Brexit.  Mr Goodwill is responsible for post-Brexit immigration policy for EU nationals so his remarks deserve our attention notwithstanding the flood of “clarifications” which they generated. It seems to me there’s a certain compelling logic to his thought if one of the implications of Brexit is the removal of the distinction between EU and non-EU migration, but the point which really troubles me is the Minister’s assertion later in his remarks that “skills are available from our own people.” The evidence of several of my clients and our own whitepaper on  employment trends suggests he ought to “clarify” that comment.

Happy New Year to you all!