Business leaders have been “left reeling” after George Osborne announced a £11.6bn payroll tax, claimed the Institute of Directors (IoD).
Companies will be charged 0.5% of their payroll from April 2017 towards the apprenticeship levy. The levy will be raising roughly £3bn a year for the following four years, according to The Guardian.
Companies, such as Tesco who employ large numbers of people and with significant amounts of property will be particularly affected by the chancellor’s latest statement; which resulted in business groups reacting with fury to the move.
“We are very concerned by the government’s assumption that a quarter of the money collected will be spent on just administering the levy. Firms have been promised they will get back more than they put in, but it’s not clear how this will happen if so much is being lost in bureaucracy,” said Simon Walker, director general of IoD.
The British Retail Consortium has estimated that business rates, the apprenticeship levy and the national living wage will cost retailers an extra £14bn over the next five years.