‘Fiendish complexity’ of apprenticeship levy is causing problems for businesses, says UHY Hacker Young

Research carried out by UHY Hacker Young found that the number of investigations launched by HMRC into the underpayment of the apprenticeship levy has increased significantly in a year to 84, up from 33 in 2017/18.

UHY Hacker Young said a growing number of businesses are finding the apprenticeship levy complex and difficult to comply with.

This is leading to businesses underpaying which potentially leaves them exposed to substantial fines, the firm said.

Clive Gawthorpe, a partner at UHY Hacker Young, said: “The fiendishly complex apprenticeship levy is clearly causing problems for businesses.

“The increase in investigations suggests that HMRC focused on larger businesses initially, as the value of potential underpayment was higher, and is now widening its net to smaller businesses too.”

He added: “We have seen additional problems arise amongst large businesses where several different parts of the same businesses group may be liable to pay the Levy.

“However, there is little guidance to help businesses calculate their liabilities.”

“The high number of investigations HMRC is launching into underpayment is a symptom of the wider problems that are hampering the schemes effectiveness. These urgently need addressing.”

In October last year, the Chancellor Philip Hammond announced a package of reforms which aimed to ensure the apprenticeship levy provided people with the skills they need to succeed.

The Treasury said the changes were aimed at providing flexibility for businesses so they could take full advantage of the benefits of employing apprentices, and to help as many people as possible find the right training to equip

them for the new economy.