If you are currently registered on our umbrella scheme then one of the latest government initiatives will affect you.
The Apprenticeship Levy comes into force from April 2017 and has been brought in by the government to generate funding for apprenticeships. The government’s aim is to provide 3 million more apprenticeships by 2020 and to improve the quality of the apprenticeships and training available.
More information on the levy is available on the government’s website.
The levy and Exchequer’s umbrella employees
The introduction of the levy will have an impact on Exchequer Solutions. The cost of the new levy to Exchequer is significant and unfortunately to cover this cost to the business we will be increasing our margin by 0.5% of PAYE per week.
The increase to our margin is relatively small however we are disappointed that the new levy has been applied in this way leaving us with no choice but to pass on the cost to our umbrella contractors.
What will happen to the funds collected under the levy?
The money collected by the government from the new levy will be allocated to an apprenticeship training fund. There are constraints on how this money can be spent.
Exchequer Solutions will not benefit financially from the increase in margin and will not be able to spend this money on anything other than training for apprentices. Any funds which aren’t spent will be retained by the government. At Exchequer Solutions we are committed to trying to ensure that our contractor workforce benefits from the levy wherever possible.
Who is affected?
Anyone who is paid PAYE, so all contractors registered on our umbrella scheme.
Self-employed workers will not be affected by the change so if you currently operate your own PSC/ Limited Company or are registered on our CIS scheme then there will be no change.
Is it time to consider your options?
If this latest legislation will have an impact on you then it might be a good time to review your current situation and the way you receive your pay. For many contractors our umbrella scheme will still be the best approach and umbrella employees can continue to benefit from employment status and all the benefits that go with it.
If you would like to discuss your options then please get in touch. We will be happy to discuss your individual circumstances and help you to decide which route offers the most tax efficient solution.