A number of intermediaries fear going out of business once the Apprentice Levy is introduced next year. That’s according to the Freelancer & Contractor Services Association (FCSA) research.
The survey shows that 14% of intermediaries believe that their businesses could be at risk as a result of having to bear the additional cost of the Levy, four in ten (38%) respondents say they have no plans about how they are planning on funding the Levy with one in ten (9%) claiming they will have to absorb it as an overhead. 40% of respondents said they would consider hiring apprentices within their own businesses, despite the levy not offsetting the full cost of doing so.
‘Not fit for purpose’
Commenting, Julia Kermode, Chief Executive of FCSA said: “Government policy makers have clearly not listened to the sector’s concerns and are pressing ahead with something that is simply not fit for purpose and not appropriate in our industry.
“Intermediaries like umbrella companies and recruitment firms have artificially high payrolls and the Levy is one more cost to be borne, effectively another tax on a sector that has had more than its fair share of additional burden in recent years. Intermediaries are clearly concerned about the impact the Apprenticeship Levy will have on their businesses with 14% of our respondents telling us that they fear going out of business because of the Levy and that is a grave concern.”