Apprenticeship levy will cause 'extreme irritation' to businesses, pub boss warns

By Sophie Witts contact

- Last updated on GMT

Apprenticeship levy will cause 'extreme irritation' to businesses, pub boss warns

Related tags: Tax, Minimum wage, Taxation in the united kingdom

The boss of the Oakman Inns pub chain has criticised the Government’s planned apprenticeship levy as an ‘extreme irritation’ to businesses.

The scheme was outlined in this week’s Autumn Statement​ and will impose a 0.5 per cent tax on employers with a wage bill of over £3m.

It is set to raise £3bn a year to from 2017 to fund 3m apprenticeships by 2020.

But in a statement following the Chancellor’s announcement Oakman Inns CEO Peter Borg-Neal criticised the levy as ‘yet another tax on employing people’.

“We don’t need the Government taking with one hand so they can claim to be supporting apprenticeships with the other,” he said.

“Furthermore, if the Government expects us to buy into the argument that we should be happy to pay higher levels of National Minimum Wage to replace tax credits they should be decreasing payroll taxes, such as ERNI rather than inventing new ones.”

More change needed

Borg-Neal – who founded the 13-strong ‘modern’ pub chain in 2007 - also hit out at the Chancellor’s failure to reform the ‘horribly unfair’ business rates system, which is calculated based on pub's 2008 turnover.

The British Beer and Pub Association warned earlier this week that community pubs will face closure​ unless the system is changed.

“I believe we need a change in the way business rates are assessed that looks at profitability rather than turnover,” said Borg-Neal.

“High quality pubs and restaurants that serve quality, freshly prepared food have higher turnover and higher costs than more value led concepts – which might have lower sales but the same profit. However, they employ more people and they tend to lift the quality of the retail environment.

“It is unfair that they are taxed disproportionately. It is a shame that the uncertainty will continue whilst we wait for the outcome of the review.”

The Chancellor’s announcement brought a mixed response from the major hospitality trade associations this week.

Despite welcoming the extension of Small Business Rate Relief Osborne was criticised by the Association of Licensed Multiple Retailers (ALMR) for failing to make ‘real and meaningful change’.

Borg-Neal said that while the Autumn Statement ‘could have been a lot worse’ he would continue to lobby the Chancellor on reforming the ‘clearly unfair’ VAT system, which sees pubs and restaurants taxed at a higher rate than supermarkets.

“As an industry we deserve more support from number 11 and the fight will go on,” he said.

“I am meeting George Osborne at a Business Briefing session this week and top of my list will be the VAT argument.”

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