In its autumn statement and spending review, the Government announced that a new apprenticeship levy would be introduced in April 2017.
Since the announcements, Skills Minister Nick Boles has warned the Charity Finance Group (CFG) that charities ought to spend the levy, or else risk losing it altogether to other organisations.
From this time next year, the levy will require employers with a wage bill of £3 million or more to pay a charge of 0.5 per cent through HMRC’s Pay As You Earn – which, in turn, will be used to fund apprenticeships across the UK.
But Mr Boles warned the CFG that charities, who are entitled to use the money they contribute to employ apprentices in their own organisations, will have their contributions distributed elsewhere if they fail to do so.
The Treasury expects that the levy will raise approximately £3billion by 2019/20.
Some 1,200 charities across the UK will be affected by the levy, at a predicted cost of around £70million.
For more information on how the new apprenticeship levy could affect you and other financial advice, please contact us.