How do I allocate an apprenticeship levy (AL)/employment allowance to PAYE schemes?

Employment Allowance

Eligible employers can reduce their annual National Insurance (NI) liability up to £4000. For more information about eligibility, see https://www.gov.uk/claim-employment-allowance/eligibility

• You can claim each month until you reach the £4000 total or until the tax year ends, whichever come first.
• The total Employment Allowance that can be allocated is £4000 across the tax year.  This is deducted from the total due to HMRC. 
• You can still claim Employment Allowance if your liability is less than £4,000 a year.
• You can only offset your Employment Allowance off your ERs NI contributions. 

To allocate the employment allowance

1. Navigate to the Employer definition window. 
   Go to Cintra iQ: Payroll> Payroll Setup> Employer Setup
2. Open the desired Employer. The Employer window appears.
3. Navigate to the Allowances tab. 
4. Select the desired Tax Year.
5. Double-click on the PAYE Scheme you wish to add the Employment Allowance. The Allowances form appears. 
6. In the Employment Allowance section, perform the following: 
   • Select the Entitled to Claim check box.
   • Enter the Allowance Take-On amount if you start using Cintra iQ part way through the tax year. 
7. Click the OK button. The allowance is allocated to the PAYE scheme. You are now ready to pay HMRC and view the reports. 
8. Continue to pay HMRC.

 

Apprenticeship Allowance

 

From 6th April 2017, all employers have a liability for the new Apprenticeship Levy (AL).

 

• The AL is calculated at 0.5% of the total Paybill for each PAYE scheme.
• The Paybill is all earnings liable to Class 1 Secondary NICs. (Liable to Employer’s NICs.)
• The Allowance applies to an Employer or Connected Group of Companies or Charities and may be split across the PAYE schemes that they operate. The total Allowance that can be allocated is £15,000 from tax year 2017/18.
• The AL is calculated for each Tax Month with the Allowance being proportioned across the year. Any resulting Levy due is reported on the EPS document and added to your HMRC Liability. This calculation happens automatically whenever the payment run is created.

Within Cintra iQ, you can allocate AL Allowances across your company’s PAYE schemes and this Allowance will be offset against any AL due for a scheme. For more information, see How Do I View the Statutory Payments for the Apprenticeship Levy?

To allocate the apprenticeship allowance

1. Navigate to the Employer definition window.
   Go to Cintra iQ: Payroll> Payroll Setup> Employer Setup
2. Open the desired Employer. The Employer window appears.
3. Navigate to the Allowances tab.
4. Double-click on the PAYE Scheme you wish to add the AL Allowance. The Allowances form appears.
5. Enter the Allowance Amount for the tax year.

     Note:

   If you have more than one PAYE scheme, then the total cannot exceed the maximum allowance for any single Employer or Group of Connected Companies or Charity.

6. Perform the following, if you have started using Cintra iQ part way through the tax year. 
   1. 1. Enter the previous Cumulative Paybill Take-On amount that you wish the current PAYE scheme to take into account.
      2. Enter the previous Cumulative Levy Take-On amount that you wish the current PAYE scheme to take into account. 
7. Click the OK button. The allowance is allocated to the PAYE scheme. You are now ready to pay HMRC and view the reports.
8. Continue to pay HMRC or view the AL reports.