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Apprenticeship Levy reforms announced ahead of the Budget

10th October 2018

The much criticised Apprenticeship Levy paid by large employers is set to be improved from April 2019.

The Chancellor has announced, ahead of the Budget on 29 October 2018, that large employers will be able to transfer up to a quarter of their apprenticeship levy funds to other firms in their supply chain.

The levy has been slated for being overly complex to administer and too rigid to cover such items as a trainee’s travel and accommodation costs. It is also seen by many as just another tax-raising measure, particularly by those who do not make use of the levy funds.

Employers have also voiced their concerns about a shortage of suitable training courses that can be funded by the scheme. Apparently, more than two-thirds of the money raised by the levy remains unspent a year after it was introduced.

Responding to the criticism, the Chancellor is reported to have accepted that more needs to be done with the levy to support the development of a skilled workforce for the UK’s post-Brexit economy.

Increased flexibility for the levy was announced earlier this year so that where a levy-paying employer does not plan to use all of the funds in its apprenticeship service account, it can make a transfer to another employer to support them in taking on apprentices.

More details are expected to be published as part of the Budget announcements at the end of this month, which Bishop Fleming will be covering in depth.

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