As of this Monday (1st November 2021), the reservation period for employers who do not pay the Apprenticeship Levy has been reduced from six months to three months.
Employers who do not pay the Apprenticeship Levy share the cost of apprenticeship training and assessment with the Government. This is under an arrangement called ‘co-investment’.
For apprenticeships starting on or after 1 April 2019, these employers pay 5% towards the cost of apprenticeship training. The Government pays the rest of the costs (95%) up to the funding band maximum.
What is the Reservation Period?
The reservation period is the window of time in which employers can reserve the Government’s 95% funding before an apprentice’s expected start date.
With the new reservation period, employers can reserve funding up to three months before their apprentice is expected to start. They then have a further two-month window after the planned date to actually start their apprentice. This, in effect, offers a five-month window between the initial reservation of funding and the apprentice’s start date.
If the apprenticeship does not start within that time frame, the reservation will expire.
Employers who do not pay the Apprenticeship Levy can make up to 10 reservations to fund new apprenticeships for the financial year 2021 to 2022.
In a statement on GOV.UK the ESFA explained that “while we had previously extended the reservation window to six months, we found that very few employers needed to reserve funds more than three months ahead.”
Any reservations made before 1st November 2021 will not be affected.