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Non levy funding – The new and improved changes
A recent change was made to the non-levy funding for employers. The change in non-taxable funds will begin on April 1st and will start by resetting the reserve level for employers who have not paid the levy on apprentices. This allows employers to set aside 10 new reserves for up to 20 new apprentices, which will begin in the 2021-22 financial year. This means that starting in April, you can have 10 new apprentices (whether existing employees or new employees).
These changes will continue to be monitored at a high level until the government determines whether this is a successful and affordable change. The government wants to see an increase in the number of apprentices, and therefore an increase in funding and available places.
Funds transferred from employers who pay levy’s to other employers through apprenticeship services are not included. This is a useful rule for calculating the employer’s number of reservations and means that you won’t lose any existing funds or reservations.
Non-levy apprenticeship funding and what it is.
Non-levy apprenticeship funds allow companies to receive helpful funding to pay for apprenticeship training costs. If your salary bill is less than £3 million, your company is eligible to receive 95% of the government funding for each apprenticeship program, which means that the company only needs to pay the remaining 5%. This allows smaller companies to provide good apprenticeships without financial burdens.
Any company with an annual salary bill of more than £3 million will automatically pay the apprenticeship levy fund. This means that the company will be responsible for providing the majority of the funding for the apprenticeship. This money can only be used towards apprenticeships for new or existing employees.
Reservation levels
For employers who do not pay into an apprenticeship levy, the reservation levels determine that the government will fund apprenticeships for smaller businesses, while also considering and managing the availability and affordability of apprenticeship fees for all employees. They do this to ensure that smaller companies have sufficient resources to provide the best apprenticeships.
How you can reserve funding
If you do not pay into an apprenticeship levy, you must retain apprenticeship funds to provide training and evaluation, which will be done in the finance department of the apprenticeship account. You can also grant training providers permission to withdraw and reserve funds on behalf of your business.
You will need to know:
- The month in which the apprenticeship started
- Apprenticeship standards to be implemented by the apprentice.
If you need to change the start date or standard of the apprenticeship, you can change it as long as the apprenticeship has not yet started
Funding status
There are 3 types of funding status:
- Active – You have reserved funds but did not add or save the apprentice details. The reservation has not yet been used but is actively underway.
- Used – You have reserved funds and added the apprentice’s details.
- Expired – You did not add or save the apprenticeship details within 3 months, so the information is no longer valid.
When to reserve funds
Starting in April 2021, funds can be retained for up to 6 months before the start date of the apprenticeship. The reserves can be used from the selected month of the apprenticeship start date, and they can also be used for the next 2 months. If the reservation is not used within the third month, the reservation will expire and cannot be used. Giving employers 3 months to use their reserved funds provides greater flexibility and more time to plan their apprenticeship programs. They can use the funds immediately, or they can make plans so that they can use the funds more accurately and efficiently.
The reserved funds cannot be used for apprenticeships that begin before the reserved funds are in place.
These changes will benefit many people and will help develop apprenticeships. The new funding will allow employers to make up to 10 new reservations to find new apprentices. This will increase the number of apprentices available, while also supporting employers financially.
Empentis Training Solutions aims to tailor all apprenticeships offered. To find more information on apprenticeships and funding, get in touch with us today.
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