The Builders Merchants Federation (BMF) has voiced its concerns that builders merchants who are unwilling to take on apprentices may be at a loss with the new Apprenticeship Levy.
A recent survey of BMF members has revealed that while just over half (51%) employ at least one apprentice, 92% of those that currently have no apprentices and had no plans to take on apprentices would be required to pay the new Levy.
This news comes following recent research that suggests almost half (46%) of construction firms will feel the financial impact of the new pay legislation will see the wages of apprentices aged over 25 increase from £6.70 to the national living wage of £7.20.
As of April 2017, all companies with a payroll of more than £3m will have to pay 0.5% of staff spending via PAYE to fund the system, regardless of whether or not they take on any apprentices.
The incentive to those taking on apprentices comes in the form of digital vouchers as the more apprentices companies take on, the more training will be available to them.
John Newcomb, managing director of the BMF, said: “The Apprenticeship Levy is designed to ensure that businesses invest in skills and training, which should be a good thing, but we are concerned that some merchants will miss out.
“Responses to our survey lead us to believe that up to a third of our merchant members may be liable to pay the Levy. If they don’t invest in the future of the industry and regularly employ apprentices in their own business, their hard earned cash will go to fund the training of apprentices in other industries. This is not a situation that anyone in the industry wants to see.”
On average, BMF members employ 14 apprentices a year and will recruit around 1,000 apprentices over the next two years. Over a third of those surveyed use the BMF Apprenticeship Scheme specifically designed to deliver trained apprentices in the merchant industry.
Mr Newcomb concluded: “The Apprenticeship Levy is designed to encourage employers to invest in developing new talent. It should not be viewed as an extra tax on employment, but a real incentive for merchants to take on apprentices and invest in the next generation.”
