Business Urges Government to Reform Apprenticeship Levy

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In response to the publication of official apprenticeship statistics, business groups have urged the government to reform the Apprenticeship Levy.

The organisations, including the Confederation of British Industry (CBI), the Institute of Directors (IoD) and the Federation of Small Businesses (FSB) have called on the government to reform the initiative before it costs UK firms ‘millions’.

The Levy was introduced in April 2017, and is paid by employers with a pay bill of more than £3 million per year. It stands at 0.5% of the pay bill, although an annual allowance of £15,000 also exists.

Apprenticeship Levy funds must be used before April 2019 – at this time, they will begin to expire.

Employers who do not plan to use all of the funds in their apprenticeship service account can now make a transfer to another employer, with the aim of allowing larger employers to support other employers.

The CBI has urged the government to introduce ‘greater flexibility’ to the system, and for ministers to ‘loosen the rules around how Levy cash is spent’. Meanwhile, the IoD has suggested that businesses should be given longer to spend the money to ‘ensure that it is spent on the most valuable apprenticeships’.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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