Does your hospitality business understand the forthcoming Apprenticeship levy?

There’s a lot of talk about the UK’s Apprenticeship levy which will be introduced in April 2017. The levy is designed to increase UK employers’ investment in training and apprenticeships and is similar to successful levies in countries such as Denmark, the Netherlands and South Korea.

Whilst the levy will ensure every big UK company plays their part in delivering a new generation of skilled apprentices and industry-led training standards, it will also help the UK government create 3 million apprenticeships by 2020. For the hospitality industry, the addition of more and better-qualified employees to an increasingly competitive job market will be very welcome news! ApprenticeshipsReturn

On top of an increased commitment to apprenticeships by employers, the levy will raise £3 billion across the UK, of which £2.5 billion will be spent on apprenticeships in England and the remainder will be distributed within the devolved nations (Scotland, Wales and Northern Ireland). The devolved governments will have their say in the development and application of apprenticeship policies in their regions.

So who pays the levy? UK employers that have a pay bill in excess of £3 million will be subject to the levy, but the good news is that businesses will also receive an allowance of £15,000 to offset against their levy payment. Funding arrangements for companies who are not required to contribute to the levy are still being considered and clarification should be available in late 2016 but People1st, the hospitality industry’s sector skills council, believes that the ‘major beneficiaries of the levy will be those small to medium businesses that will be able to access the levy without making a contribution until they hit the £3m paybill’.

Looking beyond the levy to the bigger picture, apprentices bring enthusiasm and productivity to workplaces, they can help improve staff retention and there can be a healthy return on investment for employers. If your business is seeking staff – from commis chefs to front of house staff – now is a good time to consider the benefits of employing apprentices. New apprenticeship roles can be posted from February 2016 at

Hospitality employers who would like to learn more about the benefits of employing apprentices can find further resources at People1st. In addition, the GOV.UK website will offer regular updates on the levy and employment matters, but a good place to start is Employ an Apprentice.



Author: Institute of Hospitality

Established in 1938, the Institute is the international professional membership body for managers and aspiring managers who work or study in the hospitality, leisure and tourism industries. We help more than 10,000 hospitality professionals in 100 countries grow their knowledge, professional profile and expertise offering a wide range of high quality membership services such as targeted and regular industry networking events, hospitality qualifications and extensive online quality resources such as free management guides, Hospitality magazine, webinars, ebooks and ejournals. To learn more about our many member benefits, view our website or email