Ministers are attempting to reassure small companies that they will not lose out financially due to the government’s new apprenticeship levy.
George Osborne, chancellor, announced in June that he would force all large employers to pay a levy as a percentage tax on their payroll to fund the apprenticeship system.
The government said at the time that “only larger employers” would have to pay the levy, which was mooted — although not confirmed — at 0.5 per cent of payroll.
But the business world has been awash with rumours that the Treasury was considering plans to spread the burden of the levy further by including companies with as few as 50 staff.
One Whitehall aide said that, contrary to small companies’ fears, larger companies were still set to take the brunt of the levy. “We have been clear that it is larger firms that we will be focused on,” he said. However, the government has not defined what it means by “larger employers”.
Several people familiar with the discussions said one option was to use a sliding scale for the levy, with the very largest firms paying a higher rate than relatively smaller ones.
The government is expected to finalise the details of its levy plan in the Autumn Statement at the end of November, having consulted on it for five months.
The chancellor said this would stop companies “taking a free ride on the system” by leaving the cost of training to their rivals.