New changes to how employers pay the apprentice levy

The Department for Education has made changes to how large employers pay the apprentice levy.

Large dealer groups will soon be able to transfer up to 10% of their apprenticeship levy funds to multiple businesses, helping to boost the number of high-quality apprenticeships across the country.

Large employers are defined as those who have an annual wage bill of £3m. About 2% of employers pay the levy but that investment has funded more than 40% of the apprenticeships started in the last year.

Currently, levy-paying employers can transfer up to 10% of their apprenticeship service funds to one other employer. This has been sharply criticised by companies and the take up of apprentices has been lower than expected.

Apprenticeships and Skills Minister Anne Milton said: “We want to keep improving apprenticeships for everyone and I am delighted that we are now extending the flexibility of the apprenticeship levy.

The Institute of the Motor Industry (IMI), has repeatedly called for government to take action to address the shortfall in apprentices by accelerating their proposed investment in careers advice in schools.

The IMI said the number of apprentice starts in the automotive sector had fallen by 15% since the levy was introduced.

The way the levy has been implemented has also come under fire from the Institute of Directors (IoD)