Amendments to government levy scheme will now mean 25 per cent of funds paid by eligible heating companies can be transferred into their supply chains
Larger employers within the heating sector that are currently required to pay the UK government’s Apprenticeship Levy are being urged to transfer up to a quarter of their unspent funds into their supply chains.
The Association of Plumbing and Heating Contractors (APHC) has warned that employers with annual pay bills of over £3m that have been required to pay the levy may over the last two years be losing out on the chance to upskill within their wider operations.
Mark Antrobus, director of the association, said that although hundreds or thousands of large employers in the industry are paying the levy into a special fund, they risk for the first time losing out on the opportunity to ensure these funds can support their own employees or suppliers.
He added, “There is a 24-month time limit on spending apprenticeship levy funds and consequently if a company doesn’t spend it, the government will claim it back to fund apprenticeship training for non-levy paying businesses.”
“So if you’re company didn’t spend the levy and therefore lost the remaining funds this April, I urge you not to lose the funds next year and take control now by choosing who you want the funds to go to.”
Companies eligible to pay the levy, which was introduced to improve apprenticeship opportunities in the UK, pay 0.5 per cent of their total bill for annual pay in order to support nationwide training.
Under the current scheme, five per cent of apprenticeship costs for companies with annual pay bills of less than £3m are covered by the organisation itself. The reaming 95 per cent is covered by government from the levy.
However, from April this year amendments to the levy regulation has seen an increase the allowable rate of funds that can be transferred by a company to a specific smaller employer or apprenticeship training scheme.
This transferable amount permitted has risen from 10 per cent to 25 per cent of levy funds paid by an organisation.
Mr Antrobus said that a recent Freedom of Information request has found that out of the £4.2bn in levy payments received by government since the scheme’s launch in April 2017, a total of £601m has so far been paid to employers.
He said, “so there is a real opportunity for large employers to invest in the plumbing and heating industry for the direct benefit of the many smaller companies in their supply chain and of course the thousands of plumbing and heating businesses who use and install their products on a daily basis.”
“This could help drive our sector’s growth, assist with meeting our sector’s longer-term skills requirements and of course more immediately provide much needed apprenticeships.”