The Chancellor has announced that he will review the apprenticeship levy.

In his spring statement, he said said a review of the apprenticeship levy will be part of a new Treasury tax plan, which will be finalised in the autumn.

Sunak said:

“We lag international peers in adult technical skills. Just 18 per cent of 25-64 hold vocational qualifications, a third lower than the OECD average,”

“And UK employers spend just half the European average on training their employees,”

“So we will consider whether the current tax system including the operation of the apprenticeship levy is doing enough to incentivise businesses to invest in the right kinds of training.”

Treasury documents published just after the speech outline the government’s new ‘Tax Plan‘. The plan has four themes; cost of living, capital, people and ideas.

Under ‘people’, the Treasury states that “the government is increasing skills funding significantly over the parliament. We want businesses to do the same.”

Calls for flexibilities of the apprenticeship levy have come from employer representatives for years, with various sectors wanting to use funds for other training courses and associated apprenticeship costs like travel and wages.  It would now seem that the Treasury has finally acknowledged these calls for reform.

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