“Relax apprenticeship levy rules” to help law firms

Law Society: Lawtech support call

The Law Society has called on the government to allow firms to use the apprenticeship levy more flexibly than now to create new jobs and retrain staff as part of the support needed in the wake of Covid-19.

It also urged tax incentives to encourage solicitors’ investment in technology as well as continuing wider financial support, such as a temporary cut in VAT.

The new campaign, dubbed ‘Return, Restart and Recovery’, said allowing firms to spend the apprenticeship levy on a wider range of support would allow them “to create the new jobs that will provide the backbone of the sector in the long term”.

This could be training contracts, lawtech seats within training contracts and other training in lawtech skills, training in secondary specialisations so people can re-train in other practice areas, and supporting other organisations – including in the third sector – by funding joint roles.

“This would enable firms to deliver pro-bono work in partnership with legal charities, helping to meet the likely rise in demand for such services and provide more efficient access to legal advice.”

On the back of the recent launch of Lawtech UK, the Law Society has urged ministers to “invest now” to drive the adoption of technology.

It suggested tax incentives for law firms, other legal services providers and lawtech start-ups, such as research and development tax credits and allowances (similar to capital allowances), and extending the eligibility of the Future Fund – a loan scheme for high-growth firms to drive innovation during Covid-19 – to lawtech start-ups by relaxing the requirement of a minimum level of £250,000 of seed capital.

The society also recommended establishing a legal data trust to improve accessibility of data for those seeking to innovate in the legal services sector.

The final set of demands were for targeted tax incentives to support employment and stimulate activity in key domestic markets.

Chancery Lane said the government should extend the VAT and income tax deferral schemes to help firms with their cash flow. “A longer repayment schedule would help to prevent a crunch point for many businesses early next year.”

A temporary reduction in the VAT standard rate from 20% would “boost consumer demand and support suppliers of standard rated goods and services across a wide range of sectors, including the legal sector”.

Finally, a temporary relief for employers’ National Insurance contributions would help “incentivise staff retention and recruitment as the job retention scheme comes to an end”.

Calling again for proper legal aid funding too, Law Society president Simon Davis said: “We want to build resilience in our communities by making justice accessible to all.”

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Katie McKenna

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