ARC invited to discuss potential Apprenticeship Levy reform

The Apprenticeship Levy has been applicable since April 2017, meaning that organisations whose payroll bill exceeds £3m per annum must contribute 0.5% by way of a levy. The funds are then placed into an account for the levy paying business to draw down on and use to fund apprenticeships.

The Association of Recruitment Consultancies (ARC) has, for several years now, put forward the case that the levy disproportionately affects recruitment businesses offering PAYE engagement options. This is due to payroll bills exceeding that of other businesses of similar size with a similar number of regular employees, the disconnect between the payment of levy funds, and the ability of a recruitment business to benefit from those funds. Our suggested solution has been that recruiters charge the levy to hirers, but hirers can access the amount they pay to upskill either their existing employees or agency staff.

The Department for Education (DFE) is currently reviewing the use of the levy funds to determine if changes might be proposed and has invited ARC to give its view next week. Whilst we will make the points outlined above, we would welcome your views. If you have any particular issues you would like us to raise or have any comments or specific examples that can be cited to the DFE, then please get in touch by emailing