Government urged to simplify Apprenticeship Levy

Leading accountancy body the ICAEW has called for a more ‘flexible’ Apprenticeship Levy, arguing that the UK’s SMEs are in danger of missing out on young talent if the levy is not reformed.

Introduced in 2017, companies with a pay bill of £3m or more must pay the levy but can reclaim government vouchers for apprenticeships, whereas companies with a lesser pay bill do not have to pay it but can still claim apprentice funding.

According to ICAEW, the benefits for non-levy paying employers are particularly enticing, with the government committing to paying 95% of its apprenticeship training costs, but the complexities in accessing the funds are putting SMEs off applying.

“In our interactions with businesses up and down the country, we find SMEs more and more reluctant to run their own apprenticeship schemes due to the complexity of accessing levy funds and the lack of flexibility built into the scheme,” said Iain Wright, ICAEW’s director for business and industrial strategy.

“The SME sector has traditionally been a big recruiter of 16-18 year olds for apprenticeships, so this is a concerning development which could mean that talented young people are unable to access the skills and training they need to prosper in the workplace.”

A recent report from the Association of Employment and Learning Providers found that nearly one in four (24%) apprenticeship training providers had to turn away a prospective SME employer of apprentices because of a lack of funding.

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