Robert Ayre

Subsidy Control

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Hi everyone,

Just looking for clarification on the subsidy control rules, in particular these two rules: 
P270 Waiving of the employer contribution for small employers is likely to amount to subsidy control and the subsidy control rules will therefore apply to such cases. For more information on Subsidy Control, please visit the Subsidy Control guidance on GOV.UK.

P271 Transfers of funds between employers also engage the subsidy control rules. For any transfer an employer receives, a percentage of the transferred funds will count towards the employer’s Small Amounts of Financial Assistance exemption. 

Does this include the extra support for small employers P127 to P131 and does it include employers who opt to use a transfer of levy funds to fund the apprenticeship?

Thank you

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Jerry West

You have correctly identified the relevant paragraphs. P270 covers the extra support (i.e. waiving the employer contribution under P127) and P271 includes employers who use a transfer of levy funds.

Comments in this thread: https://esfahelp.education.gov.uk/hc/en-gb/community/posts/4403492894994-Subsidy-Control suggest that subsidies are only a concern where they affect international trade. YMMV.

In our experience, it's not usually a big deal.  If the empoyer looks at you blankly, the chances are they are not currently in receipt of subsidies and this won't push them over the limit - £275,000 over three years. A simple letter/declaration acknowledging this will suffice (search Subsidy Control Declaration - several local authorities have posted their documentation which could act as a good start point).  The form from the Greater South-East Net Zero Hub has a useful list of what might count as a subsidy to help baffled employers.

If they do know what you're talking about (you may have to go to the finance department, though) then they can do the math for themselves once they understand the rules concerning apprenticeships.  If they're over the limit then you cannot apply the exemption/levy transfer.

Jerry