Apprentice levy ‘scam’ exposed

The union Unite is calling for the closure of a loophole, which results in workers having the apprentice levy deducted from their wages, and could result in some companies generating a profit.

Unite has received a growing number of payslips from workers in different sectors, including construction, which show that employment agencies and umbrella companies are deducting the apprentice levy from workers’ pay.

The apprentice levy was introduced last year and companies with a payroll of over £3 million are expected to pay 0.5% of the payroll costs to the HMRC. This money is then earmarked for apprentice training.

It is not illegal to pass this cost on to the worker, providing it has been agreed. In reality, most sign up in order not to lose the work they have been offered, according to Unite.

Furthermore, if an agency or umbrella company charges their entire workforce the apprentice levy they will in fact be making an additional profit, as they don’t pay the levy on their first £3 million of payroll.

Unite assistant general secretary Gail Cartmail said: “The most unscrupulous umbrella companies and agencies are deliberately undermining the apprentice levy by forcing workers to pay something which is supposed to be their responsibility.”

She continued: “If the government fails to act, support and confidence in the apprenticeship levy will be further undermined.”