UK Chancellor’s spring statement: Dedicated apprenticeship funding for small firms UK Chancellor’s spring statement: Dedicated apprenticeship funding for small firms

UK Chancellor’s spring statement: Dedicated apprenticeship funding for small firms
19 Mar 2018

UK chancellor Philip Hammond pledged in his spring statement not only to make dedicated funds available for smaller employers to take on apprentices, but also to start a consultation into extending IR35 contractor tax rules to the private sector.

Hammond said the education secretary would release up to £80 million (US$112 million) to support small businesses in employing an apprentice, after admitting that the current system made it challenging for firms of this size to do so.

The apprenticeship levy, which was introduced last April to boost the number of apprenticeships in companies of all sizes across the UK, was recently described as 'woefully inadequate' at a government select committee hearing. It is paid by larger employers with payrolls of more than £3 million (US$4.2 million).

The Federation of Small Businesses welcomed the prospect of more funding. National chairman Mike Cherry told People Management: "It’s good to see £80 million of much-needed dedicated funding for small firms that are keen to take on an apprentice. Small businesses are key to delivering the government’s target of three million new apprenticeships by 2020."

Hammond’s written ministerial statement also confirmed that a consultation into off-payroll working in the private sector would be launched over the coming months. The aim is to evaluate how best to tackle non-compliance based on the experiences to date of the public sector. The announcement would appear to confirm a widespread industry belief that IR35 may be extended to the private sector.

Despite the lack of new policy statements, the coming tax year will bring in a number of previously announced changes that UK employers will need to take account of. These include rises in auto-enrolment minimum contributions, an increase in the pension lifetime allowance, changes to tax bands and alterations to income tax rates for employees in Scotland.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

UK chancellor Philip Hammond pledged in his spring statement not only to make dedicated funds available for smaller employers to take on apprentices, but also to start a consultation into extending IR35 contractor tax rules to the private sector.

Hammond said the education secretary would release up to £80 million (US$112 million) to support small businesses in employing an apprentice, after admitting that the current system made it challenging for firms of this size to do so.

The apprenticeship levy, which was introduced last April to boost the number of apprenticeships in companies of all sizes across the UK, was recently described as 'woefully inadequate' at a government select committee hearing. It is paid by larger employers with payrolls of more than £3 million (US$4.2 million).

The Federation of Small Businesses welcomed the prospect of more funding. National chairman Mike Cherry told People Management: "It’s good to see £80 million of much-needed dedicated funding for small firms that are keen to take on an apprentice. Small businesses are key to delivering the government’s target of three million new apprenticeships by 2020."

Hammond’s written ministerial statement also confirmed that a consultation into off-payroll working in the private sector would be launched over the coming months. The aim is to evaluate how best to tackle non-compliance based on the experiences to date of the public sector. The announcement would appear to confirm a widespread industry belief that IR35 may be extended to the private sector.

Despite the lack of new policy statements, the coming tax year will bring in a number of previously announced changes that UK employers will need to take account of. These include rises in auto-enrolment minimum contributions, an increase in the pension lifetime allowance, changes to tax bands and alterations to income tax rates for employees in Scotland.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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