Good and bad in Osborne spending plans

Chancellor of the Exchequer George Osborne leaves the Treasury in London for the House of Commons, where he will deliver his joint Autumn Statement and Spending Review.PRESS ASSOCIATION Photo. Picture date: Wednesday November 25, 2015. See PA story BUDGET Main. Photo credit should read: Tim Ireland/PA Wire

Chancellor of the Exchequer George Osborne leaves the Treasury in London for the House of Commons, where he will deliver his joint Autumn Statement and Spending Review.PRESS ASSOCIATION Photo. Picture date: Wednesday November 25, 2015. See PA story BUDGET Main. Photo credit should read: Tim Ireland/PA Wire

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Businesses have given a mixed reaction to some of the measures included in George Osborne’s Autumn Statement.

Leaders have welcomed clarification of the Chancellor’s apprenticeships levy.

But there is concern over the scrapping of tax relief for contractors.

Mr Osborne announced the levy on large companies to fund apprenticeships is being set at 0.5 per cent of an employer’s pay bill.

The move, from April 2017, will raise £3 billion and eventually fund three million apprenticeships.

A £15,000 allowance for employers will mean that the levy will only be paid on employers’ pay bills over £3million, so fewer than two per cent of UK employers will pay it, said Mr Osborne. “Any announcement which provides promising news, both for companies and our future workers, is something to be applauded,” said Babs Murphy, the North & Western Lancashire Chamber of Commerce chief executive.

“The relief of small business rate is obviously a benefit for the local firms who stand to gain from this announcement.

“What is also pleasing is the targeted number of apprenticeships; we need to develop the next generation of locally based, skilled workers in order to prevent a ‘brain drain’ elsewhere and the apprenticeship levy should hopefully encourage this.”

Meanwhile, the decision to restrict tax relief for travel and subsistence expenses for workers engaged through an employment intermediary, such as an umbrella company or a personal service company will raise just £265m for the Treasury.

However, research by Lytham-based Danbro suggests the move could cost each freelancer an average of £200 a week.