Charities need 'more time' to prepare for apprenticeship levy

The new guidance on the apprenticeship levy has failed to address the sector's' concerns, says the Charity Finance Group


The Charity Finance Group has criticised new government guidance on the apprenticeship levy, saying that it fails to address charities’ major concerns about the policy and does not give them enough time prepare for its introduction.

The apprenticeship levy, which comes into effect in April 2017, will force employers with wage bills of at least £3m to pay a levy of 0.5 per cent of their overall payroll amount to the government.

Each employer will receive £15,000 to offset the cost of implementing this, and the difference between what they pay out and receive from the government will be put into a digital account and made available for employers to provide apprenticeship schemes.

The latest government guidance, released today after an almost two-month delay, confirms that the apprenticeship levy scheme will apply from the start of the next financial year, with levy-paying employers being able to access funds in their digital accounts after 22 May 2017.

But the CFG has criticised the government for not giving charities enough time to prepare for the levy.

The CFG and the Charity Tax Group have also both previously called for the levy to be delayed for a year due to the economic uncertainty caused by the vote to leave the European Union.

Heather McLoughlin, policy and public affairs officer at the CFG, said: "This guidance comes only eight months before the start of the scheme in April 2017, leaving little time for charities to fully prepare. CFG has repeatedly called on the government to exempt charities from the April 2017 start date so we have time to develop quality apprenticeships that can really benefit the sector."

McLoughlin also criticised the guidance for its lack of clarity over how the government will tackle problems relating to the charity sector including the lack of a charity sector skills council and anxiety over whether charity donations will be used to subsidise private sector employers’ apprenticeships.

"It is important that any future guidance from the government should be informed by someone who understands the charity sector to ensure that charities are not just crowbarred into the policy, but actually benefit from it," she said.

The guidance says it is looking for views about whether proposals to allow employers to transfer 10 per cent of their levy funds to other organisations, although there are calls for further concessions for the charity sector.

John Hemming, chairman of the CTG, said: "The proposal at the moment seems to be that anyone can give and assign 10 per cent of their levy pot, but we would want charities to be able to assign more, if not 100 per cent, of what they can’t use.

"This is on the basis that trustees of charities have a duty to maximise reliefs for their purposes, and therefore, if they can’t use it themselves, to assign it to another charity that has similar activities we feel would be appropriate."

Finance News

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in
RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now