Using levy funds after a change in an employer’s organisational structure

The levy balance available to spend on apprenticeship training is displayed in each employers Apprenticeship Service (AS) account.  Whilst this funding is made available to employers to fund apprenticeship training, it is not an asset of the company, and should not be considered as such if there is a structural change.

As a result of this, we cannot currently offer the functionality to move funds between AS accounts.

If an employer's organisational structure changes

If an employer’s structure changes, for example, there is a company takeover, and the new employer has legal ownership for the old employer, the new employer can retain access to existing AS accounts.

The employer needs to obtain legal advice to determine if they retain legal ownership of the organisation. The employer then has two options on how to manage their AS account.

Option 1:

The employer can add the new employer(s) to their existing AS account, adding the new PAYE schemes to allow the levy funds to continue to be paid into the original account.

All apprenticeship starts must be added to the account which contains the PAYE scheme through which they are paid through to claim apprenticeship funding.

All organisations added to this account can access the accrued levy funding for their apprentices.

Apprentices should be moved to the correct organisation within the AS account.

Option 2:

The employer will require a new AS account for the new organisation if they do not wish to continue to share levy funds. To help employers manage this transition, the employer should follow the below steps:

• Remove any continuing PAYE schemes that are associated with the original account and add them to the account that they want to use in the future. This will ensure levy funds are allocated to the correct account.
• If a PAYE Scheme is removed and added to another account, the apprenticeship record will need to be moved to that account with their PAYE Scheme by recording a change of employer. This is a policy requirement of the 2024/2025 main provider funding rules.
• If you retain legal ownership of the organisation on the original account, you can continue to fund existing apprentices on the original account. This means you can use the levy accrued levy balance. You are not able to add new apprentice records to the original account after the PAYE scheme has been removed.
• All unspent funds will expire after 24 months and so you will not be able to fund apprenticeships on the original account after 24 months as they will fall into co-investment

Please note - it is the employer’s responsibility to ensure the apprentices are being funded through their preferred account and move them at the appropriate time if they wish them to be funded through the levy funds accrued on the new account.

If this is not completed on time and co-investment is charged, this will need to be paid by the employer as outlined in the funding rules.  If co-investment is not paid in full, this will affect the completion payment that is paid to training providers.

Last updated on 22 October 2024 08:30