With the Spring Budget 2023 approaching on March 15th, there has been a rise in criticism and calls for the Apprenticeship Levy to be reformed.
The Apprenticeship Levy was introduced in April 2017 as a tax paid via the Pay As You Earn (PAYE) system, alongside a business’s usual tax and National Insurance payments. Once HMRC have received the payment of the Levy, it is put aside in a digital fund. Levy money can be used by employers to buy apprenticeship training for employees at all ages and levels. Organisations of any size, in any sector, can also access funding.
The Scheme was brought in to try increase the number of apprenticeships on offer throughout the UK. However, due to the requirements needed to be able to utilise the fund, many believe the Chancellor should review the rules that are currently in place for Employers to take advantage of the Levy for it to truly benefit those looking to use it. Businesses have called for the reform to introduce flexibility especially in the areas of the workforce where they are facing shortages in staff. It was reported by Contractor UK that Tesco, Marks & Spencers and Balfour Beatty have raised the below key points regarding the Levy:
The levy is not flexible enough.
Funds are only available to those who have the same employer for at least one year.
Employers have 24 months to use their funds once they enter their apprenticeship service account, after this point, their funds will expire.
It was estimated that up to £3billion of levy funds to date (in total) have gone unspent.
The Apprenticeship Levy should be able to provide workers a route to skilled work and to encourage individuals to develop their skills in their sector with the incentive behind them for support.