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Smaller firms push for tax credits on training


The CBI's smaller firms are pressing Gordon Brown for £62 million-worth of tax credits to help fund staff development programmes and close skills gaps. As TrainingZone reported recently, some plans to create incentives for companies to train the unskilled are likely in the next Budget.

The CBI group are suggesting that tax credits would help companies with less than 50 employees to get an Investors in People Award (IiP), which encourages firms to develop all staff in line with business needs. IiP already covers 38 per cent of the work force. But small companies have traditionally struggled to get the awards as they often lack personnel resources or are unaware how it could benefit business.

Melfort Campbell, Chair of the CBI's SME Tax Working Group, said: "Business is determined to help find a solution and Investors in People is the best tool we have. Many firms have been singing the praises of the award and now we want to help more small companies get the benefits as well."

Mr Campbell accepted that the new credit would be limited to firms with up to 50 staff. But he warned the Chancellor not to forget larger small and medium-sized companies. "Small firms are not just organisations with less than 25 or so staff," he said. "Other small and medium-sized companies often get forgotten in the enterprise debate but they are crucial to the growth of the economy."

The credits would comprise two lump-sums, one for assessing training needs and another for developing and assessing the resulting training strategy. The CBI estimates that the cost of the needs assessments would be £23 million, assuming participation by 20 per cent of small companies without IiP. It believes the cost of developing and assessing training programmes would be £39 million, assuming participation by 10 per cent of small companies IiP.

The CBI has long complained that the UK is held back by skills gaps, pointing to statistics showing one in five adults are functionally illiterate. Thirty six per cent of the UK workforce do not have the equivalent of five GCSEs compared with 27 per cent in France and 17 per cent in Germany.

The CBI is also pushing for simplification in tax and payroll. It said payroll administration has become particularly onerous with the introduction of measures like the working families tax credit and student loan repayment. They claim that this is being exacerbated by an over-complex systems for the pay-as-you-earn scheme and national insurance contributions.

What would you like to see in the next budget for HR and training?


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