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Businesses lambast Tories over apprenticeship tax

Stakeholder groups concerned new tax could discourage training and apprenticeships

THE COUNTRY’S BIGGEST BUSINESS GROUPS have launched a scathing attack on the Conservatives’ tax proposals ahead the party’s conference in Manchester, which commences on Sunday.

Formal submissions sent to the government by the Confederation of British Industry (CBI), manufacturers’ organisation the EEF, British Chambers of Commerce (BCC), and the Institute of Directors (IoD) particularly call on the party to row back on proposals to introduce an ‘apprenticeship levy’.

Chancellor George Osborne (pictured) first raised the prospect in his Summer Budget address, suggesting the imposition of the new tax on larger businesses, with the proceeds funding training schemes at smaller companies.

CBI deputy director-general said: “A new levy won’t be welcomed by business, so we want to see a new politically independent levy board setting the rate based on clear evidence with the funds ring-fenced.”

She went on to warn there is a “high risk” the move could “undermine the system, not strengthen it” at a time when firms are “already investing over £40bn a year on formal training and increasing apprenticeships”.

There has yet to be any detail released on the proposed rates, or the threshold at which firms would become affected.

However, the BCC said there is a “significant risk” the levy would cause businesses to focus on compliance “rather than the voluntary adoption and promotion of apprenticeship training”.

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