Businesses left in the dark over apprenticeships

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Many businesses are struggling to plough the funding back into apprenticeships (Source: Getty)

Firms remain confused about how to make the most of the government’s apprenticeship levy, six months after it was introduced.

A survey of businesses by the British Chambers of Commerce (BCC), released today, has found nearly a quarter of firms (23 per cent) paying the tax do not understand it.

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And, more than half (56 per cent) do not expect to recover anything from their payments to the government.

The apprenticeship levy, which was introduced in May, is a 0.5 per cent charge on an employer’s pay bill. It applies to firms with a pay bill of more than £3m.

Every company that pays the new tax is handed a £15,000 allowance, which is subtracted from their levy payment.

The government has introduced the tax to help deliver 3m apprenticeships by 2020.

However, there are concerns that businesses do not know how to use the funds they receive from the government to boost skills.

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The BCC found in its survey that 66 per cent of the companies under the £3m threshold, which are still eligible to apply for apprenticeship funding, have not taken action to use the money, or they do not know they are entitled to it.

Jane Gratton, head of business environment and skills at the BCC, said: “Firms need greater flexibility on how they can use their levy monies and a system that is fully operational as quickly as possible, is simple and efficient, and that enables them to access good quality training.

“More information and support is required to ensure businesses continue to invest in training.”

A Department for Education spokesperson said: “We want all employers to understand the benefits that high quality apprenticeships and the apprenticeship levy can bring them. That is why we will continue to work with employers and training providers, showing them how much they will pay and how they could use their funds for training. This is a great opportunity for both employers, their businesses and for the apprentices who are gaining valuable skills."

Tags: Tax