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25/11/2018

Government announces apprenticeship levy reforms

Chancellor Philip Hammond has announced a package of new measures to reform the under-fire apprenticeship levy.

Under the revised rules, employers who pay the apprenticeship levy will be able to transfer a quarter of their funds to organisations in their supply chain, including smaller employers.

Levy-paying businesses have been able to transfer up to 10% of their training funds to other employers in their supply chain since April 2018, but the new measures will increase this to 25%.

The reforms also include £5 million of extra funding for the Institute for Apprenticeships, to improve training standards and update existing ones.

The Government is also to review the future role of the levy.

The announcement follows rising calls for reform among several business organisations, which criticised the levy for its inflexibility and burden on businesses.

After the year-on-year number of new apprenticeships dropped by 39% in April 2018, the Confederation of British Industry (CBI) said the levy system was “not working as intended”.

For further information on the Apprenticeship Levy, please contact Richard Hurst on 023 8046 1208.

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