39% of business owners still have no understanding of the forthcoming apprenticeship levy, according to research by the British Chambers of Commerce (BCC).

30% of the 1600 medium-sized businesses (employ between 50-249 employees) surveyed will have to pay a levy of 0.5% on their annual pay bill (of over £3 million) when it comes into force from April 2017.

26% expect to recover all or more of their levy payment.

Further findings:

  • 51% are unsure how the funding reforms work above or below the pay bill threshold
  • 11% say the levy will increase their recruitment of apprentices
  • 5% say it will have a positive impact on their wider training budget.

The government recently announced details of how the proceeds of the levy will be used to fund 90% of the training costs that companies too small to pay the levy (around 98% of employers) will face when taking on apprentices.

An additional support of £2,000 per trainee will also be available for firms that take on apprentices aged 16-18 or young care leavers.

Nigel Holland from Holland & Co Chartered Accountants said:

 “Apprenticeships are increasingly favoured by school leavers and young people.

I welcome the Government’s incentives to support businesses to endorse the apprentices, such as using the proceeds of the levy to fund 90% of the training costs for smaller companies, as well as the additional £2,000 support for each trainee.

The government needs to give simple guidance for businesses, especially those smaller firms, and highlight the potential benefits of using the levy in improving training and development of apprenticeships.

 Contact us today to discuss apprentices and employee training.”