27 November 2015 #Employment
Earlier this year the Government announced that it would be introducing an apprenticeship levy on large employers as part of its pledge to create 3 million quality apprenticeships over the next five years.
In August the Government launched a consultation seeking views on how this levy should be implemented and its response to this was published on Wednesday. George Osborne communicated some of the Government’s decisions during his Spending Review and Autumn Statement speech on the same day.
Key information about the levy:
It’s far too early to tell what the effect of the levy will be in practice. Whilst those businesses fully embracing the scheme could, as George Osborne put it, ‘get more out than they put in’ it is fair to say that many are concerned about the introduction of the apprenticeship levy, not least because it comes at a time when businesses are already being impacted by other financial changes such as the national living wage. Whilst the levy may only effectively be paid by 2% of UK employers, those 2% employ a vast number of the UK’s private sector workforce and the Office of Budgetary Responsibility have voiced concerns that the levy will have a negative effect on earnings growth, meaning that the costs will largely be passed on to employees.