SMEs should be exempt from apprenticeship levy, claims CBI

The Confederation for British Industry (CBI) has questioned George Osborne’s apprenticeship tax, stating that SMEs should be exempt from contributing to the levy.

During his summer budget presentation, Chancellor George Osborne revealed that businesses in the UK will start paying a tax towards funding the creation of 3m apprentices by 2020.

The CBI has released a new briefing paper addressing the levy, calling for Osborne to avoid charging SMEs.

‘‘Small employers should remain exempt from the levy – but levy funding should not be used to cross-subsidise apprenticeships for small business,’’ said the CBI in a statement.

‘‘The approach being piloted, where the government contributes to the majority of the training costs of apprenticeships, should continue for small firms.’’

The CBI has also called for the levy to be fair and proportionate to all forms of UK business and subject to proper consultation.

‘‘Getting the rate and reach of the levy right will be critical – and the CBI is calling for full consultation on this. Once the rate is agreed, it must be subject to regular scrutiny and review.’’

‘‘The levy should support the development of vocational skills and apprenticeships in every part of the UK and exemptions from the levy must be made where mandatory sector levy schemes remain in place.’’