The Apprenticeship Levy And Its Impact On SMEs
The apprenticeship levy Basics
The Apprenticeship Levy And Its Impact On SMEs.Small to medium-sized enterprises or businesses (SMEs) surmount to around 5.4 million UK businesses. This means that they make up the vast majority of companies in Britain, and in doing so, they play a vital role in the British economy.
Whilst owners of SMEs throughout the length and breadth of the country are no doubt toying over whether they will be voting in or out in the UK’s upcoming referendum on its membership to the European Union, the Apprenticeship Levy is perhaps some more welcome food for thought in the build-up to the 2017-2018 financial year.
It was widely reported in 2015 that Prime Minister David Cameron declared:
“The greatest asset any employer has is their workforce. And by investing in them, they are investing in the success and future of their business.”
The increased taxation to fund an apprenticeship kitty will open the door for many smaller businesses to access government funding and integrate apprenticeship schemes within their business models. Many SMEs will have championed apprenticeship schemes for several years, but to a large number of UK companies, it will be a new and somewhat unnerving venture.
The opportunity for SMEs to train apprentices in their workplace can bring huge benefits, and the rewards are plain to see. It gives the business or organization a chance to develop younger workers to meet the company’s ethos and mission statement. The financial rewards are potentially huge, but the benefits of taking on a young, keen workforce working towards a workplace qualification are priceless.
All employers are eligible for an allowance of £15,000, having the opportunity to offset this against their levy payments. This, in turn, means that Larger SMEs who fall into the £3 Million + annual payroll bracket will also feel the impact of the Apprenticeship Levy. The increased taxation implies that these companies will be putting an action plan into practice to cope with or combat the 0.5% levy.
Many larger businesses proudly support apprenticeship schemes and see them as having a positive impact on society and a valid means of dealing with youth unemployment. The moral responsibility of larger firms to provide support in this area is undoubtedly justified. Still, from a business perspective, budgets and expenditures will probably need to be re-structured if businesses feel that the taxation is too large a dent to cover. This is why many people fear that the current workforce at the larger organizations will feel the most significant impact, as their wages could suffer from reducing the ‘damage’ of the Levy.
At present, the jury is out on the Apprenticeship Levy and its impacts on SMEs. It is expected that further information will be drip-fed by the government over time, and therefore business owners should make a conscious effort to research and understand the Apprenticeship Levy and the various factors surrounding its integration into the British economy.
It is also worth looking into Apprenticeship Trailblazers; a term is given to groups of employers who are, from experience, reporting on standards and re-writing the book on apprenticeship schemes and how they are run in the UK.
1. What is the apprenticeship levy?
The apprenticeship levy is a tax that businesses in the UK have to pay if they have a pay bill of more than £3 million per year. The money raised from the levy is used to fund apprenticeships.
2. Why was the apprenticeship levy introduced?
The apprenticeship levy was introduced in order to increase the number of apprenticeships in the UK.
3. How has the apprenticeship levy impacted businesses?
The apprenticeship levy has had a mixed impact on businesses. Some businesses have been able to use the levy to fund apprenticeships, while others have found it to be a burden.
4. What are the benefits of the apprenticeship levy?
The apprenticeship levy has helped to increase the number of apprenticeships in the UK. It has also helped to fund training for businesses.
5. In conclusion, the apprenticeship levy has had a positive impact on businesses and apprenticeships in the UK.
The apprenticeship levy has been a positive force for businesses and apprenticeships in the UK. It has helped to increase the number of apprenticeships and has provided funding for businesses to train their employees.