The Charity Finance Group said it is “disappointed and concerned” by the government’s plans to press ahead with a new apprenticeship levy in April next year, despite claims the levy could funnel charity money to private businesses.
The levy aims to create three million new apprenticeship placements by 2020, by charging employers with a wage bill of more than £3m a total of 0.5 per cent of their annual payroll amount.
The scheme puts the money into a pot – from which organisations can claim to pay for apprenticeship training. But the tax has been criticised by sector bodies over concerns that charities will be required to pay the full levy, despite not requiring the full apprenticeship training allowance.
Instead, CFG and the Charity Tax Group have called for a delay to the levy’s introduction to allow charities more time to push for alternative proposals.
Anjelica Finnegan, senior policy and public affairs officer for CFG, told Civil Society News that said she was “disappointed” and “concerned” by proposals to press ahead with the levy.
“CFG has repeatedly voiced concerns that the sector faces unique challenges that will hinder charities’ ability to spend their levy pots – not least the fact that there are currently no charity sector-specific apprenticeship standards – and therefore face the very real possibility that charitable income could be redirected to private business,” she said.
“A delay in the levy’s introduction would have given the sector time to address these challenges. I am particularly concerned to see in the guidance produced on Friday, the government is only seeking views on proposals to allow employers to transfer a maximum of 10 per cent of their funds to another employers digital account from 2018.
"The government has previously said that a mechanism to allow employers to transfer levy funds would address the sector’s concern that charities could see their unspent levy funds being used to subsidise private businesses.”
CFG said it will respond to the government’s consultation, requesting that charities be able to transfer 100 per cent of levy pots that they are unable to spend.
Finnegan’s comments follow earlier calls by the Charity Tax Group for the government to postpone the levy’s start date in light of concerns about its impracticality for charities and the potential for donor funds to go to private businesses.
This morning, the apprenticeships and skills minister Robert Halfon, said the levy would provide a “ladder of opportunity” for young people seeking “a chance to get on in life”.
“The apprenticeship levy is absolutely crucial to this,” he said.
“Our businesses can only grow and compete on the world stage if they have the right people, with the right skills. The apprenticeship levy will help create millions of opportunities for individuals and employers. This will give our young people the chance they deserve in life and to build a highly skilled future workforce that the UK needs.”
But a spokesman for the Department for Education declined to comment on specific concerns that have been raised by the sector bodies.
