The Apprenticeship Levy has come under fire from the Freight Transport Association (FTA), with the trade association calling for the charge to be paused during the COVID-19 crisis.
It says that businesses should paying tax towards a funding programme they are unable to draw down from.
With logistics businesses unable to recruit new apprentices due to social distancing rules, and with no new training programmes getting under way at this time, it is urging Government to review the continued use of the Levy during the pandemic.
Christopher Snelling, head of UK policy at FTA, explained: “Due to social distancing rules and restrictions on training, most businesses are now unable to recruit new apprentices.
“Logistics businesses are already under intense financial pressure – our recent survey identified 76% of respondents as having experienced a downturn in business since the COVID-19 outbreak – and to expect them to continue to pay into a funding programme they can no longer access is unfair to the industry charged with keeping the UK trading.
“Add to this the fact that the Treasury continues to reclaim any unused funding – despite the fact most businesses are unable to hire new apprentices – and it seems that the logistics sector is being taxed unfairly while under extreme stress. FTA is urging Government to rethink its approach as a matter of urgency.”
The Apprenticeship Levy is a tax on employers which is used to fund apprenticeship training. It is payable by all employers with an annual pay bill of more than £3 million at a rate of 0.5% of their total pay bill.