THOUSANDS of businesses across the South East will soon be required to pay the apprenticeship levy into a digital account through the pay as you earn process.

The levy applies to companies with annual pay bills over £3 million and is calculated on the entire pay bill at a rate of 0.5 per cent minus a levy allowance of £15,000.

Employers across the region will be able to use the digital vouchers to invest in existing and new talent to upskill their workforce.

The additional overhead, or tax, for businesses across the region may not be welcome. However, it does present an opportunity to invest in talent and tackle any skills gaps in order to help stimulate growth.

In addition, employers that pay the apprenticeship levy in England will also receive a ten per cent top-up from the Government to their total monthly contributions, which presents an additional incentive.

So for every £1 an employer pays in they can draw down £1.10 to spend on apprenticeship training through their apprenticeship account.

The new levy will transform how apprenticeship training is funded and delivered and, with implementation starting in April, businesses need to be ready to apply and administer the new measures.

It will be important to establish a robust system for doing so to take into account factors such as pay rises, bonuses and NI contributions for employees turning 25. This will enable a business to accurately calculate the levy charge.

Graham Farquhar is employer solutions partner at RSM, a provider of audit, tax and consulting services