39% of business owners still have no understanding of the forthcoming apprenticeship levy, according to research by the British Chambers of Commerce (BCC).

30% of the 1600 medium-sized businesses (employ between 50-249 employees) surveyed will have to pay a levy of 0.5% on their annual pay bill (of over £3 million) when it comes into force from April 2017.

26% expect to recover all or more of their levy payment.

Further findings:

• 51% are unsure how the funding reforms work above or below the pay bill threshold
• 11% say the levy will increase their recruitment of apprentices
• 5% say it will have a positive impact on their wider training budget.

The government recently announced details of how the proceeds of the levy will be used to fund 90% of the training costs that companies too small to pay the levy (around 98% of employers) will face when taking on apprentices.

An additional support of £2,000 per trainee will also be available for firms that take on apprentices aged 16-18 or young care leavers.

Marcus Mason, head of education and skills at BCC, said:

“The government should allow businesses to use the levy funding to support other high-quality workplace training or there is a risk of displacing other valid forms of training.

“Fundamentally, treating apprenticeships as a numbers game would benefit neither businesses nor apprentices themselves.”

David Williams, director corporate engagement at Middlesex University, added:

“It is really important that government communicates to businesses the value of the levy in terms of its use to drive up the quality of on-the-job training and development.”