Apprentice Levy will cost digital sector £120m

New analysis from the Tech Partnership suggests that the digital industries’ contribution to the Apprenticeship levy is likely to be between £120m and £150m, accounting for around 9% of the predicted total.

The Partnership has undertaken detailed analysis of recent Office National Statistics (ONS) data surrounding the possible impact and funding of the apprentice levy, which comes into force in April 2017. As part of that, the latest ONS ONS Annual Business Survey (ABS) “show the digital industry in 2014 encompassing approximately 164,000 enterprises1 – i.e. 7% all enterprises in the UK at that time and 7.8% of those covered by the ABS (which covers ‘only the UK Non-Financial Business Economy’)”

Among these digital enterprises, the ONS data shows that in 2014 there were 1,400 companies that reported gross wages and salaries of £3m or more (0.8% of all digital enterprises) and 1,600 with total employment costs at that level (1.0%).

 

‘Sixth highest contributor’

By way of comparison, among UK enterprises as a whole (excluding financial services) there were 16,700 in total (0.8%) with gross wages and salaries of £3m or more and 18,800 with total employment costs at that level (0.9% of the total).

In total, 8% of firms affected by the levy are likely to be from the digital industries, and in terms of the digital sector’s contribution versus compared to those of other sectors, it would be the seventh highest contributor to the levy when considering gross wages and salaries, and the sixth highest when considering total employment costs.
 The figures come hot on the heels of continued calls from businesses and their trade bodies to delay and rethink the levy.