The Chancellor of the Exchequer, George Osborne, is being asked to take another look at the 2017 Apprentice Levy and make amendments to it so that just permanent staff are affected by it and not temporary workers and contractors.
The Recruitment & Employment Confederation (REC) has addressed an open letter to the Chancellor regarding the amendment. The REC stated that while it supported the objectives of the levy, it believed that in its current form, the levy was unfair to temporary workers and contractors. Hence, the Exchequer should refrain from imposing it.
The Apprentice Levy has the ability to force organisations with more than a £3 million annual bill to fund apprenticeships by paying a tax of 0.5 per cent on their overall payroll payments.
The REC said that the payroll as per the levy should not include agency workers who take up short assignments and usually do not qualify for apprenticeships. The REC also stated in its open letter to Osborne that charging a levy that extended beyond the payroll of permanent staff would cause employers to shift a majority of their workers to off-payroll. To avoid this from occurring, the REC suggested that agencies and the government should work together to develop a levy that also offers training to temporary workers.
REC CEO Kevin Green said that the Confederation was asking Osborne to come up with a reasonable solution so that recruiters would have to pay just for their permanent staff and not for temporary workers who don’t work in their businesses but are assigned to other sectors and industries.
Even an IT contractor would be affected by the Apprenticeship Levy, especially if the contractor assigns temporary staff to clients.
Green stated that the government needs to work with contractors and agencies to come up with ways to provide temporary workers and contractors flexibility to work and without having to forgo training and development.