https://sfadigital.blog.gov.uk/2018/04/06/5-pointers-to-help-employers-prepare-for-transfers-on-the-apprenticeship-service/

7 pointers to help employers prepare for transfers on the apprenticeship service

From May 2018 employers who pay the apprenticeship levy will be able to transfer apprenticeship service funds to other organisations to pay for their apprenticeship training and assessment

For the first phase, employers who have unused funds in their apprenticeship account will be able to transfer some of those funds to one other employer. The number of employers that you will be able to transfer funds to will increase over time and after user feedback from the first phase.

So what do you need to think about now to prepare for transfers as a levy-paying employer?

1. Consider how much funding you will be able to transfer

You can transfer up to a maximum of 10% of your annual funds, which will be calculated from the total amount of levy declared during the previous tax year.

Example

  • The total apprenticeship levy declared to HMRC by Employer A in the 2017 to 2018 tax year was £500,000
  • 90% of their wage bill goes to employees living in England so their ‘English percentage’ is 90%
  • £500,000 x 90% = £450,000
  • Add 10% government top-up. 10% of £450,000 = £45,000, so total is £495,000
  • Employer A’s transfers allowance for 2018 to 2019 is 10% of the above total, so £49,500

This calculation will be done for you and you will be able to see your 10% transfer allowance in your apprenticeship service account at the end of April. You’ll then be able to set up a transfer from May and the employer receiving a transfer will be able to register and start adding apprentices to the service. Your first transferred funds can then come out of your account from June.

2. Consider the total costs of any apprenticeships you would like to support

As the sending employer you are responsible for managing the amount of funding that you transfer and for funding the whole cost of the apprenticeships you are supporting, up to the funding band maximum.

It is likely that the apprenticeships you fund will last longer than 12 months and they may start at different points in the year. The funding to pay for the apprenticeships will transfer monthly to the receiving employer to cover the exact training and assessment costs over the duration of the apprenticeship.

Remember, in future financial years, if you continue to make levy declarations, you’ll have new transfer allowances.

3. Find a receiving employer

This can be any employer. You might want to choose an employer in your supply chain or sector, or perhaps you would like to support your local economy. It is your choice as long as the funding is being spent on apprenticeships.

The receiving employer can be a levy-paying employer as long as they are not sending a transfer. If you are sending a transfer you cannot also be in receipt of a transfer.

 4. Have detailed conversations with your receiving employer

Discuss the number and type of apprenticeship standards that you could fund with a transfer and the total cost. You and the receiving employer might want to read Hire an apprentice for general information about employing an apprentice and use Find apprenticeship training to search for different types and levels of apprenticeship.

5. Read the funding rules

We have updated the apprenticeship funding rules to include the rules for transferring apprenticeship service funds (refer to paragraphs E173 to E207 for the rules on transfers).

6. Review and sign the new employer agreement

The employer agreement in the apprenticeship service will be updated to include transfers. Any employer that wants to send or receive a transfer needs to digitally sign the new employer agreement. A draft version of the updated employer agreement can be viewed on GOV.UK before it is released into the service.

As you may need to get approval from your organisation’s legal team or legal adviser, it makes sense to start reviewing the agreement in advance, so that you’re ready to sign it when you want to start setting up a transfer. You could share the employer agreement with the receiving employer so they can review the document as well.

7. Agree the details in advance with the receiving employer before starting to set up the transfer on the apprenticeship service

To send and receive a transfer, both employers will need to have an apprenticeship service account. However, it is important that the receiving employer doesn’t rush into registering for an account as they will need to have lots of details in place first. They won’t be able to add any apprentices on the service until early May.

For instance, a receiving employer shouldn’t register on the apprenticeship service for a transfer until they have agreed the apprenticeship standard and total cost with the employer sending the transfer.

To make a transfer, the sending employer will need to make a connection with the receiving employer on the apprenticeship service. To do this, they will need the receiving employer’s account ID, which will be clearly displayed in their account.

We’re creating a series of bite-sized videos to help employers register for an apprenticeship service account, make and receive transfers and set up apprentices on the service. The videos will be on ESFA’s YouTube channel.

You can share our online information pages and the first video ‘What you need to set up an apprenticeship service account’ with potential receiving employers.

Checklist to get ready for transfers

  1. Read the introduction to transfers
  2. Watch this 3-minute video on transfers
  3. Read the funding rules for transfers
  4. Review the updated employer agreement
  5. Have conversations with potential receiving employers and share transfers online resources

 

2 comments

  1. Comment by Steve Smith posted on

    When will the final funding rules be released?

    Reply

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