Merchants must not lose out on Apprentice Levy, warns BMF

Published:  11 February, 2016

The BMF has voiced concerns that builders’ merchants who are unwilling to take on apprentices may lose out when the UK government introduces the new Apprenticeship Levy in April next year.

A survey of BMF members revealed that while just over 51% employ at least one apprentice, 49% have no current apprentices, and of those, 92% of merchants who would be required to pay the new Levy had no plans to take on an apprentice in the future.

Details of the Apprenticeship Levy were announced in the Autumn Statement. Companies with a payroll of more than £3m will have to pay 0.5% of staff spending via PAYE to fund the system. The more apprentices companies take on, the more training will be available to them – in the form of digital vouchers - but they will have to pay the levy whether or not they take on any apprentices.

On average, BMF members employ 14 apprentices a year. However, that figure encompasses national multi branch groups with an annual three-figure apprentice intake to single branch operations that may recruit one apprentice every few years. While smaller companies will not be required to pay the levy, those in the middle range could be affected.

BMF managing director John Newcomb 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. The Levy will not only affect national merchants. Many regional groups and larger independents with 150 plus employees will find themselves in the payroll bracket required to pay the Levy.

“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.”

The BMF estimates that its members will recruit around 1,000 apprentices over the next two years. Over a third of members surveyed use the BMF Apprenticeship Scheme provided by Didac and specifically designed to deliver trained apprentices in the merchant industry. Others, mainly larger merchants, operate their own in-house schemes.

Sixty-one per cent of current merchant apprentices are studying for the more advanced NVQ Level 3 qualification, while 39% are following NVQ Level 2 courses. This is reflected in the ages of current apprentices: 16-18 year olds – who are most likely to take the Level 2 qualification – account for 30% of the total, 53% are aged between 19 and 23, while the remaining 17% are 24 or over.

Mr Newcomb said: “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. However, the Levy must not be used to replace public funding for secondary education. It is imperative that English Language and Mathematics learning continues to be met out of general taxation.”

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