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Budget predictions: Employer solutions and the Apprenticeship Levy

13.11.2017

Our experts have their say on what the Chancellor could announce ahead of the first ever Autumn Budget.

Employer solutions
With regards to off-payroll working through an intermediary company:
  • There is a possibility that the Chancellor could extend to the private sector the IR35 changes introduced last year for the public sector. In a nutshell, this could mean that employers in the private sector will have to operate PAYE and NIC for contractors in many cases where, currently, (for employers outside the public sector) this had been the responsibility of the contractors’ personal service companies. This would mean a large increase in cost for businesses that use contractors as well as significant additional administration. (Lee Hamilton, partner)
  • There is mounting pressure on the government to bring change to the private sector in this area following the Taylor Review on working practices earlier this year, to level the playing field in the face of evidence from recruitment agencies that the public sector is now struggling to attract contractors following the IR35 changes introduced last year (which were limited to the public sector) and a recognition by HMRC that this is a large area of non-compliance in the private sector – a change is coming. (Lee Hamilton, partner)

The Apprenticeship Levy
  • A recent study by the British Chambers of Commerce indicates that almost half of employers with an annual wage bill of more than £3m do not expect to recover apprentice levy payments through the hiring of apprentices and official figures show there has been a decline in the number of people starting an apprenticeship between May and July 2017 as compared with the same period in 2016. The cost of the levy can be significant and, for some, feels like an extra tax. A review and some reforms to the apprenticeship levy could mean that more business will have the ability to access funds for training apprentices and meet the government’s objectives. (Helena Kanczula, corporate tax director)

For more information please contact Lee Hamilton or Helena Kanczula.