Firms’ fury over ‘chaotic’ £700m apprentices tax
BUSINESSES are facing a £700 million tax bombshell which they fear will damage the economy, jobs and growth.
The Apprenticeship Levy will be introduced next April, with medium and large firms being made to pay up.
The Scottish Mail on Sunday has learned it will cost firms north of the Border £690 million over three years.
Scots companies already pay some of the highest business rates in the western world after the SNP introduced an additional supplement last April.
Business leaders fear many will now downsize or not take on workers to avoid having to pay even more.
The tax will be levied on all organisations with 250 employees or more – including public sector bodies, such as the NHS, which are expected to pay £73 million a year.
The levy has been launched by the UK Government, but will be administered by Holyrood. Scots firms say their English counterparts have been given more information about the plans and how to claim money back for their own apprenticeship schemes.
In a scathing attack on the SNP’s handling of the tax, Scottish Chambers of Commerce chief Liz Cameron said firms north of the Border had endured 18 months of consultation but received no answers.
‘The introduction of the Apprenticeship Levy by the UK Government, and the subsequent lack of information and decision from the Scottish Government, since it was announced some 18 months ago, has been chaotic,’ she added.
‘Businesses in Scotland are now 16 weeks away from being charged additional tax, with no idea from the Scottish Government how they plan to collect this tax; how – and if – businesses can claim it back; what the process will be for those businesses in Scotland who have offices elsewhere in the UK; and, ultimately, what it intends to spend £690 million of additional tax gathered direct from business on.’
David Lonsdale, director of the Scottish Retail Consortium, which represents shops, said it was imperative employers paying the levy in Scotland should be able to access the funds for their own schemes, as in England.
Liam Kerr, the Scottish Conservatives’ skills spokesman, said: ‘The Scottish Government was presented with a great opportunity as a result of the Apprenticeship Levy. But it has done next to nothing, and now businesses are rightly asking why.’
Jamie Hepburn, the Employability and Training Minister, said the new levy had been imposed by the UK Government without consultation with the Scottish Government. He added: ‘We understand that employers want to see how those funds are being used. Funding for apprenticeships and wider skills will be set out as part of the overall Scottish budget in due course.’
‘Scottish Ministers have done next to nothing’
THE SNP may talk a confident game when it comes to demanding further powers for the Scottish parliament but it appears that Ministers are less sure-footed when using the authority they are granted already.
Scottish businesses face a £700 million tax bombshell after the introduction of an Apprenticeship Levy next April. But company directors complain that they have been woefully under-informed about how the new tax will work.
The levy was devised by the UK Government but charges for companies north of the Border will be administered in Scotland. All companies employing 250 or more staff will be obliged to pay the new tax; those liable for the levy deserve to know exactly how it will work.
But, according to Scottish Chambers of Commerce chief Liz Cameron, firms in Scotland have endured 18 months of consultation without receiving answers. She describes the Scottish Government’s handling of the introduction of the Apprenticeship Levy as ‘chaotic’. The Scottish Government’s response – that this is a tax introduced by Westminster – amounts to little more than a huffy ‘it wisnae us’.
If the SNP wishes to make credible its relentless demands for a more muscular Holyrood, it might begin by competently handling the responsibilities it has already.
Right now, the Scottish Government’s amateurish handling of this policy does little to inspire confidence.