Employers are to be taxed for having Apprentices

George Osborne has announced that an “apprenticeship levy” will be charged to large businesses, as part of the Conservative’s first budget as a majority government.

A levy is simply a tax or a fee, imposed by the government.

Employers have raised concerns about the plans - which aim to fund apprenticeships through the money raised by the tax - warning that the policy is a “blunt tool” in driving up standards of vocational training.

George Osborne said during his budget announcement that while many firms did a “brilliant job” in training their workforces, there are still too many large companies that “leave the training to others and take a free ride on the system”.

Ministers want the biggest apprentice employers to pay into a fund, and are planning for the fund to be directly controlled by those contributing to it.

The move will provide financial support for the promise to create 3 million apprenticeships by 2020, and shift responsibility for skills funding from the state to the private sector.

The Treasury has not provided any detail on the scale of the levy or the businesses that will be made to pay it.