ESFA have today (27 Jun) updated information about transferring funds to another organisation in the apprenticeship service.
How will transferring funds work
Employers who pay the apprenticeship levy and have unused apprenticeship funds can find employers who want to receive a transfer in a number of ways, for example:
- work with employers in your supply chain
- get in touch with employers in your industry
- get in touch with an Apprenticeship Training Agency (ATA)
- work with regional partners
How much can you transfer
You can transfer a maximum amount of 10% of your annual funds.
Levy-paying employers can currently transfer funds to 1 other organisation from their apprenticeship account.
From early July 2018, levy-paying employers will be able to make transfers to as many employers as they choose.
The apprenticeship service calculates this amount by:
- the total amount of levy declared in the previous tax year
- with the English % applied
- plus the payment of 10% from the government
What transfers can pay for
Transferred funds will be used to pay for the training and assessment cost of the apprenticeships agreed with the receiving employer.
Sending and receiving employers need to know that:
- funds are paid monthly for the duration of the apprenticeship
- only levy-paying employers can make a transfer
- any employer can receive and use transferred funds
- sending and receiving employers have to be registered on the apprenticeship service
- a transfer can only be used to pay for training and assessment for apprenticeship standards
- transfers can only be used for new starts
What you need to do to start a transfer
The sending employer and the receiving employer need to first agree the details of the transfer of funds; for example, which apprenticeship standard, how many apprentices, the cost.
Once both employers are registered on the apprenticeship service the following must be done in their accounts to complete a transfer:
- connect with each other
- receiving employer to add the apprentice details
- confirm the transfer
Employers who are transferring funds
Before you make a transfer from your apprenticeship account, make sure that you:
- have enough funds to transfer to another employer
- have a clear understanding of the forecasted cost to you, which will cover the duration of the apprenticeship you’ve agreed to fund through a transfer
- understand you will be funding the total cost of their apprenticeship and not just the 10% co-investment
- agree with the employer who is receiving the transfer, details of the apprenticeships you’re funding
- are aware of the funding rules around transferring apprenticeship funds
You should also know:
- you can’t transfer funds to another employer if you currently receive a transfer
- if you’re currently transferring funds to another employer, you can’t receive transferred funds to pay for your apprenticeships
- transfer payments will leave your apprenticeship service account first, each month
- if the apprenticeship stops, your transferred payments will stop as well
Employers who want to receive a transfer
If you want to receive a transfer from another employer you must be aware of the following:
- you can only use the transferred funds for apprenticeship training and assessment
- transferred funds can only be used for apprenticeship standards
- you’ll need to create an account on the apprenticeship service to receive the transfer and pay for apprenticeship training
- you’ll need to sign an agreement with the Education and Skills Funding Agency (ESFA)
- transfer payments will be made monthly from the sending employer to your apprenticeship account
- if the apprenticeship stops then the funding will stop too
- you won’t have to pay any funds back to the sending employer
- if the employer sending you funds runs out of funds, you must make a 10% contribution to the cost of apprenticeship training and the government will pay the remaining 90% (this is called co-investment)
- a transfer can fund up to the funding band maximum of a standard, if the cost of training is more, you’ll have to pay the difference to the training provider
- if a training provider transfers funds to you, they cannot deliver the training for that funded apprenticeship
- funding rules around transferring apprenticeship funds
10% of all the funds you receive as a transfer from another employer count as state aid.
What is state aid?
So that you do not go over the allowed limit of €200,000 for state aid in any 3 year period, you should check:
- how much state aid you’ve already received
- if you’re part of a connected organisation, how much combined total state aid you have received