Coming into force in April, the Apprenticeship Levy, announced by the former chancellor George Osborne in 2015, will fund an expansion of apprenticeships.
Under the levy, which will apply to all businesses including schools with a wage bill of over £3 million a year, employers will have to pay 0.5 per cent of their payroll.
Schools that employ their own staff, for example an academy or faith school, will be exempt from the levy if their wage bill is under the £3 million threshold.
However, the LGA says that where a school is maintained and its staff are technically employed by the local authority, those staff contribute to the overall wage bill of the council – rather than being counted separately, and consequently will have to pay the levy. This means the tax will have to be accounted for in school budgets from April 2017.
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