Early estimates from the National Council for Voluntary Organisations (NCVO) have found that around 1,200 UK charities are expected to be affected by the new apprenticeship levy, collectively costing the sector almost £70 million.

The plans to introduce an apprenticeship levy were announced in the 2015 Autumn Statement and will see employers with a wage bill of more than £3 million having to pay the levy of 0.5% through Pay As You Earn (PAYE) from April 2017.

The government will use the money raised to fund apprenticeships, including those offered by charities. It is estimated that the levy will raise £3 billion by 2019/20.

Sir Stuart Etherington, Chief Executive of NCVO, said: “Young people have been hard hit in recent years and I believe it’s important that the charity sector plays its part in creating opportunities, but it’s also important that there is meaningful consultation on the details. We’ll be talking to the new Institute for Apprenticeships to make sure these schemes work well for apprentices and employers in the sector.”

John Hemming, chair of Charity Tax Group, said: “While most charity employers will not be caught by the new apprenticeships levy, some larger charities will be and the additional costs will place an additional strain on already stretched budgets.”

If you would like to know more about the apprenticeship levy and whether your organisation will be affected, please get in touch with our professional advisers that specialise in this area. For more information on how Milsted Langdon’s charities team can help, please contact us.