Changes to non-levy Apprenticeship Funding

March 30, 20210

Apprenticeship Funding

What is non-levy apprenticeship funding?

Non-levy apprenticeship funding allows businesses to receive helpful payments to pay for training. If your salary bill is less than £3 million, then you are eligible to receive 95% government funding for each apprenticeship, meaning the company only has to pay the remaining 5%. This allows for smaller businesses to provide good apprenticeships without having the burden of funding.

Any company that has an annual payroll of over £3 million automatically pays into an apprenticeship levy fund. This money can only be spent on apprenticeships for new or current staff.

Changes to non-levy Apprenticeship Funding Image-02
Apprenticeship Funding

Recent Changes

There have recently been changes made to the funds for employers who do not pay the apprenticeship levy. The changes to the non-levy funding will commence on April 1st and will begin by resetting the reservation levels for employers who do not pay the apprenticeship levy. This enables employers to make up to 10 new reservations for funds towards their new apprentices, who will start in the financial year 2021-22. This means you can have 10 new apprentices (either current or new staff) starting from April.

These changes will continue to be monitored with a focus on the reservation levels. They will stay under review until the Government determines if it is a successful transitional change. The government wants to see the uptake of apprenticeships increase, hence the increase in funding and availability of spots.

A helpful rule put in place, is that funds transferred from employers who pay the levy to other employers through the apprenticeship service are not included when calculating the employer’s number of reservations. This means you will not lose any funding or reservations you already have.

Apprenticeship Funding

Why are there reservation levels

For the employers who do not pay the apprenticeship levy, reservation levels give a certainty that the government will pay for the apprenticeship funding, while also considering and managing the availability and affordability of apprenticeship funding for all employees. They do this to make sure that smaller businesses have the resources to provide good apprenticeships to the best level they can be at.

Apprenticeship Funding

How to reserve funding

If you do not pay the apprenticeship levy you must reserve apprenticeship funding to provide training and assessments, this will be done in the financial sector of your apprenticeship service account. You can also give your training provider permission to reverse your funding on behalf of your business.

You will need to know:

  • What month the apprenticeship will start
  • What apprenticeship standard the apprentice will be doing.

If you need to change the apprentice’s start date or standard this is allowed as long as the apprenticeship has not started.

There are 3 funding statuses:

  • Active – you’ve reserved the funds, but not added or saved that apprentices details. The reservation has not yet been used but is actively being done.
  • Used – you’ve reserved the funds and added the apprentice’s details.
  • Expired – you didn’t add or save the apprentices details within 3 months, so it is no longer valid.
Apprenticeship Funding

How to reserve funding

From April 2021 funds can be reserved for up to 6 months before the apprentices start date. The reservation funds are available to use from the selected month of the apprenticeships start date, while also following on to 2 months after. If it is not used within the 3rd month the reservation will expire and cannot be used. Giving employers 3 months to use their reserved funds allows for more flexibility and more time to plan their apprenticeship programmes. They can use the funding straight away or they can develop a plan, this allows for the funds to be used more accurately and more effectively.

Reserved funds cannot be used for apprenticeships that began before the reservation funding was made, and put in place.

These changes will benefit many people and will help develop the apprenticeship schemes. The new funding will allow for employers to make up to 10 new reservations to find new apprenticeships. This will increase the number of apprenticeships available while also supporting employers in a financial way.

Capital 4 Training aims to make sure our apprenticeships are always tailored to the individual learner to ensure they build the skill set needed for a job. If you’d like any more information on apprenticeships, funding and courses, get in touch today.

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