Measure
The government will explore whether the current tax system – including the Apprenticeship Levy – sufficiently incentivises business investment in high quality employee training.
The government recognises that many employers are frustrated with the tight restrictions placed on how they can spend their Apprenticeship Levy funds. The government will consider whether to allow more flexible apprenticeship training models to be funded in the future. However, there has been no announcement of any concrete changes.
Large employers who are required to pay the Apprenticeship Levy.
No definitive timeline for the review or future changes has been announced.
The announcement builds on the low-level reforms announced at the Autumn Budget 2021 and previous fiscal events aimed at reversing the trend of reduced employer spending on employee training in general and apprenticeships in particular.
However, employers who are subject to the Apprenticeship Levy will be disappointed that there has still not been any significant widening in the scope of the type of training that can be funded by an employer’s Apprenticeship Levy fund. Currently, most large employers are unable to spend their Apprenticeship Levy payments in full and approximately £1 billion of funding expires per year without having been spent on employee training. To change this, a significant increase in flexibility on the type of training that can be funded with Apprenticeship Levy funds would be necessary.