Payroll tax is ‘sting in tail’ says CBI boss
The Chancellor set the apprenticeship levy on employers at 0.5% of the total wage bill which was described as a “sting in the tail” of a generally business-friendly statement.
Bryan Buchan, chief executive of Scottish Engineering said: “We are gratified to see clarification of the apprenticeship levy in England and Wales. However, we await with interest to see how Holyrood will respond to benefit the apprentices in Scotland. There are of course, a number of engineering companies with sites in England and Scotland so it will be interesting to see how they implement this programme given that apprenticeships are devolved to the Scottish government.
Carolyn Fairbairn (above), CBI Director-General, said: “This was a good spending review for longer-term investment in the economy but there’s a sting in the tail in the size and scope of the apprenticeship levy.
“Businesses will be pleased to see the Chancellor staying the course on deficit reduction, his commitment to an industrial strategy, and the emphasis on nurturing a vibrant business community.
“Standouts include maintaining spending on infrastructure; ramping up housebuilding; support for energy-intensive sectors and for advanced manufacturing.
“Business recognises there are tough choices to be made in balancing the books, but many are reaching a tipping point, where the cumulative burden of the living wage, apprenticeship levy and business rates risk hurting competitiveness.
“The Apprenticeship Levy, set at 0.5%, is a significant extra payroll tax on business and by widening the net it will now catch more smaller firms. We welcome the creation of a levy board to give business a voice on how the money is spent and will work with the Government to ensure a focus on quality.
“Many firms will be disappointed to have been kept hanging on for a much-needed review of business rates until next year’s Budget.
“Firms will be reassured by the protection of the science budget, but the shift from grants to loans for Innovate UK could dampen bold and game changing innovation, particularly amongst smaller businesses.”
Mr Buchan said there was “potential benefit” in the exemption of steel and chemical industries from environmental tariffs.
“How will it help Scottish companies? As usual, the Chancellor’s broad brush leaves so much to be discovered later when the details emerge.”