HM Revenue & Customs has published draft regulations which if adopted would implement the Apprenticeship Levy and set out how it would be recovered. Under the proposals, businesses with a pay bill (wage bill) of over £3 million per annum would be required to pay a levy of 0.5% of the pay bill. Whilst government data indicates that it is only expected to catch 2% of UK employers, the manner in which the legislation has been drafted catches the pay bill of recruiters engaging agency workers on a contract for services and from whose payments the recruiter must deduct PAYE income tax and National Insurance Contributions.

Funds accrued as a result of the levy will be available to UK employers wishing to engage an apprentice and arguably this could include apprenticeships within recruitment, be that in administration or as a consultant. Whilst the purpose of the levy should be supported the question must be asked whether it is fair for agency worker’s pay to be included within the scope of the levy as there are unlikely to be agency worker apprenticeships.

The draft regulations can be found here and information on the original proposals can be found here.