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New apprenticeship tax levy in UK criticized by businesses

Staff Writer |
Business groups voiced concerns about the government's decision to go ahead with the apprenticeship levy on large companies, which would help pay for training.

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The government will help fund employer apprenticeship schemes to address the growing skills shortage, by imposing a 0.5% payroll tax on all employers with an annual wage bill over 3m pounds, in a policy initially announced by former Chancellor George Osborne.

The state will bear 90% of the costs of training for about 98% of companies with a wage lower than 3m pounds. There will be 2,000 pounds of extra support for every trainee between 16-18 years old or if they are a young carer. In companies with less than 50 employees, the government will cover the entire cost.

Skills minister Robert Halfon said: "Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers."

The levy encroaches on traditional Labour territory as the Conservative party aims to gain ground with the working class vote, by promoting manufacturing after the Brexit vote.

Halfon added: "Apprenticeships give young people, especially those from disadvantaged backgrounds, a ladder of ?opportunity."

The plans are under consultation until 5 September, will be confirmed in October and implemented in April 2017.

However, leading business organisations said the levy needs more thought as it only covers one type of training and businesses need time to prepare.

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