Apprentice levy could hit small catering equipment companies

While many commercial kitchen kit manufacturers and distributors are putting in major efforts to attract and train apprentices to try and bring down the demographic of the sector and avoid a skills shortage, it seems some could be adversely affected by news from the government’s latest Comprehensive Spending Review and Autumn Statement.

Chancellor George Osborne announced that an apprenticeship levy will come into effect in April 2017, at a rate of 0.5% of an employer’s pay bill. However, a £15,000 allowance for employers will mean that the levy will only be paid on organisations’ pay bills over £3m.

Nevertheless, this essentially places the financial onus on employers to fund apprenticeships – and with a significant amount of catering equipment distributors and manufacturers in this country falling into the small- to medium-sized business bracket, it could hit the industry and smaller companies hard.

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Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), commented: “The Apprenticeship Levy, set at 0.5%, is a significant extra payroll tax on business and by widening the net it will now catch more smaller firms. Even those businesses most committed to training and development won’t be able to recoup their outlay.

“We welcome the creation of a levy board to give business a voice on how the money is spent and will work with the government to ensure a focus on quality.”

Simon Walker, director general of the Institute of Directors, agreed, saying: “The levy can only be described as a new payroll tax. At 0.5% of payroll it will be a big new cost for many companies, including medium-sized ones.”

The EEF, the manufacturers’ organisation, said in a statement: “This cannot be a simple numbers game where businesses are clobbered to pay for apprenticeships. The apprenticeship levy is a blunt instrument.”

While the government claims that less than 2% of UK employers will pay the levy, it remains to be seen whether this will stifle the move towards more vocational training, particularly in catering equipment manufacturing and commercial kitchen design.

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