There seems to be a level of confusion around the Apprenticeship Levy, which came into effect last week. Businesses with payroll costs of at least £3 million will have to pay a 0.5% levy, which the government hopes will fund 3 million apprenticeships by 2020. However, many employers are unsure about how the levy will work in practice, particularly regarding eligibility and funding, while others have never even heard of it. Nonetheless, the scheme, which aims to raise £3 billion a year, should increase investment into the vocational skills market and create positive opportunities for outsourced training providers.
A third of employers liable to pay the new Apprenticeship Levy from April are not even aware of its existence, suggests research. A similar number of employers, polled for City and Guilds, said the levy, aimed at boosting apprentice numbers, would encourage them to hire more. Some said they would cut training budgets to pay it. The government said the levy would "give millions a step on the ladder of opportunity".