Apprenticeship Levy

CTG has been invited to meet DCLG officials this week to discuss the impact of the new Apprenticeship Levy on charities. To recap, charities with pay bills in excess of £3m will face a levy of 0.5% on that amount. While the majority of charities will not be affected a good number will be and could face significant additional costs and associated administrative complexity.

It is important that the Levy works for charities and is not simply a new payroll tax. While CTG supports the efforts to generate new opportunities and funding for apprentices we would be concerned if charities are unable to create sufficient apprenticeships to utilise their Levy contribution, especially if this surplus is then used to subsidise staffing costs for big businesses (possibly raising questions relating to non-charitable expenditure). We recognise that the intention of the levy is that it is employer-controlled and that organisations will get the opportunity to use their contribution to the levy to fund their own apprenticeships. Generally speaking charities are less likely to operate conventional apprenticeships and an important question going forward will be how broadly drawn the definition of apprentice is and what types of qualifications/traineeship are eligible for funding.

Charities also face limitations on capacity (donors already question the number of full-time staff charities employ and there may be a limit on the extent of support needed) and funding (with many charities faced with limited core funding with much of the income often designated for specific projects) which means they may not be in a position to simply introduce new apprenticeship schemes. Furthermore, the wage bills of certain charities relate to staff for which there is no ready-made apprenticeship in place (clergy for example) and arguably that income should not be taken into account when calculating the pay bills of charities for the purposes of this Levy.

We still need additional information from members on the likely impact of the Apprenticeship Levy and details of the number of existing apprenticeship schemes within the charity that are likely to be able to benefit from the Levy. Please send any feedback by 13 January 2016.

Review of the Community Infrastructure Levy

As previously reported, DCLG has published a consultation to review the effectiveness of the Community Infrastructure Levy (CIL). CTG has been engaged with members and officials during the consultation process, but we now need specific feedback from members to help finalise our response. Please send any comments to us by 14 January 2016.

There is an important charity exemption from CIL, which means that many of the consultation questions about its implementation are not of direct relevance to charities. However, the consultation does include a question on what impact exemptions and reliefs have on delivering infrastructure. We worked very hard to secure this exemption and while there is no indication that DCLG intends to remove it, we must highlight the ongoing importance and value of having this exemption. We are also conscious that the roll-out of CIL has not been uniform, with some local authorities implementing it, while others have not.

Employer provided living accommodation – Call for Evidence

CTG is also finalising its response to the Government’s Call for Evidence on the current tax treatment of employer provided living accommodation. This will inform decisions about whether and how to simplify this area and follows two reports by the Office of Tax Simplification covering their review of employee benefits and expenses. The report found that:

• there was a lack of clarity about what constitutes living accommodation, and when and how the exemptions apply
• the exemptions are outdated: newer professions are not represented while it is hard to see why exemptions for some occupations still exist
• as well as being outdated the exemptions appear arbitrary and can result in different tax treatment for employees in very similar jobs which creates complexity and unfairness.

The current exemptions are very important for a number of charities including churches, universities, heritage charities and independent schools and it is important that we can demonstrate their ongoing importance and value. CTG will be meeting consultation officials this week to discuss the proposed reforms, in advance of preparing a consultation response on behalf of members. Please send any feedback by 1 February 2016.