The Government has mounted a new raid on businesses with a tax on wage bills to raise £11.6bn over the next five years.
The apprenticeship levy will impose a 0.5pc tax on employment costs to help pay for three million apprenticeships over the course of the current Parliament.
You want business to employ more people so you tax business which employ people. Well done George, well done.
The actual effect will be:
But the Office of Budget Responsibility, the independent fiscal analysis body, warned that employers were likely to pass the entire cost of the new tax on to their staff by suppressing pay rises. Such an outcome could threaten the Chancellor’s aim of a “lower welfare, higher wage” economy.
Yup, that’s what will happen.