The Apprenticeship Levy

In his Autumn Statement the Chancellor set out his proposals to introduce a levy on ‘large employers’ to pay for new apprenticeships.

Employers have rather a lot to handle at the moment. There is the living wage, auto-enrolment, changes in tax treatment of expenses and PAYE reporting, and today in announcing an apprenticeship levy the Chancellor added yet another item to the list.

The government is keen to arrest the decline over the past 20 years in the amount spent on training employees. We see and hear the results of this decline every day when employers complain about a skills shortage. The government hopes this levy will go some way towards addressing this complaint.

The levy of 0.5 per cent will apply from 6 April 2017 to all employers whose wage bills exceed £3m. The new measure will raise £3bn for the government levy but will hit some employers particularly hard, especially those with high wage bills and small or zero profits eg companies supplying temporary workers such as staff agencies who will have little option but to pass the cost on to their customers.

If you would like advice on the apprenticeship levy, please contact Bill Longe.