The Apprenticeship Levy – Winners And Losers
16 to 24-year-olds: The Apprenticeship Levy Winners And Losers, Apprenticeships give young people the opportunity to gain workplace skills whilst earning a salary in a wide array of professions. Historically associated with the Trades – e.g. electricians, plumbers, carpenters – apprenticeships are now widely available in many job types, from engineering and design to education and PR. With tuition fees on the minds of many 16-24-year-olds, a leap from higher education into the workplace has become increasingly popular, and those embarking on apprenticeships have the opportunity to climb onto the first step of a career ladder with an annual salary and the opportunity to gain a sponsored qualification at the same time. The introduction of the Apprenticeship Levy means an increase in workplace apprenticeship schemes and increased opportunities for a younger workforce.
The Government: From a political point of view, George Osborne’s dramatic u-turn on tax credit cuts in the Autumn of last year and the announcement of increased taxation for bigger businesses will have indeed won over those members of the British public who had, until then, feared the possibility of further austerity. With another year to go until the levy’s introduction, the government’s ongoing efforts to raise funds for apprenticeship schemes show an active and no-nonsense approach to combating youth unemployment in the UK – a welcome stance given the severity of the situation.
SMEs: Small to medium-sized enterprises will undoubtedly want to make the most out of government funding. An increased pot of money resulting from the levy means that there will be further opportunities for smaller businesses and organizations to integrate apprenticeship schemes as part of their business models – this comes as no surprise, as it has been reported that apprentices can be worth around £214 per week to businesses.
Companies will also be able to claim £15,000 each tax year for the training of apprentices; this allowance will help dramatically in terms of the money that is owed in the form of taxation, with businesses falling under the £3 Million payroll not having to contribute to the levy. £15,000 is supplied in the form of vouchers, and employers will have two years to claim these funds.
Large companies: Increased taxation is rarely greeted with open arms by those on the receiving end, and 0.5% of an annual payroll is a large sum of money to businesses eligible to pay the levy.
Current workforce: As Larger companies will have to source funds for the levy, there is a belief that it is not the company itself that will take the brunt, but moreover the current workforce. To source the funds needed, companies could look to slow down pay rises and re-address employees’ salaries to combat the 0.5% levy.
Career-changers: With government funding for apprenticeships incredibly appealing to various businesses, more and more entry-level jobs are effectively being replaced by apprenticeship positions. This means that for older career-changers – some of which may have been made redundant in their profession – it may become more challenging to break into other industries as they do not fit the criteria for an apprenticeship position.
University alumni: Facing the same challenges as career changers, university alumni reportedly struggle to find work opportunities directly related to their chosen field of study. With Apprenticeship places only available to those who do not carry appropriate university qualifications, an increase in apprenticeship places could mean a lack of entry-level job opportunities for the thousands of young adults who graduate from university each year.