All businesses should pay apprenticeship tax » SMEInsider

All businesses should pay apprenticeship tax

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The government’s skills adviser has proposed for all businesses to pay an apprenticeship levy in order to fund the Conservative’s recruitment scheme, regardless of whether employers have an apprentice or not.

On 14th June, the government announced plans to create 3m apprenticeships by 2020 and to give apprenticeships equal legal treatment as degrees.

The announcement has been met with scepticism from Professor Lady Alison Wolf, who has launched a new report entitled: Fixing a Broken Training System: The case for an apprenticeship levy.

The King’s College professor and government skills adviser is known for her 2011 vocational education report which was submitted to the Coalition government, with all her recommendations being accepted in full.

Within her latest report, Wolf claims that ‘‘David Cameron’s talk of improving apprenticeship quality while also having 3m new apprenticeships by 2020 is self-deception, at best. Under current budgets, it simply cannot be done.’’

It has been suggested that the Conservative government plan to fund its apprenticeship programme with revenue from Visa charges and bank fines, something that Wolf does not agree with.

Wolf has instead suggested the government impose a 0.5 per cent levy on employer payrolls, regardless of whether the employers hire apprentices or not. This would include every single one of the UK’s 5.2m small businesses.

‘‘To rebuild apprenticeship as a robust and credible institution for the long-term it needs a secure funding source. A small but hypothecated payroll levy on businesses is the only simple and robust way to do this.’’

By emulating a system deployed by countries such as Denmark, France and Austria, the government would be able to raise £2bn towards a new apprenticeship scheme.

An apprenticeship fund is a practical way to kick-start the revival of apprenticeships now, forcing all employers to take note and take action.’’