From education to employment

Transferring your apprenticeship levy to another business

Information for large employers about transferring unused apprenticeship levy funds to another business to pay for their apprenticeship training and assessment.

Why transfer my apprenticeship levy funds?

Large employers that pay the apprenticeship levy can choose to transfer up to 25% of their levy funds each year to other businesses, to pay for their apprenticeship training and assessment.

Transferring levy funds is a way of supporting other businesses by deciding which sectors, skills or local areas you’d like to fund.

For example, you could support the engineering sector across England, or fund digital apprenticeships in your local area, or support any apprenticeships in a particular town or city.

Which businesses and apprenticeships you support with a transfer is your choice.

Your transfer allowance

Your transfer allowance is calculated as 25% of your previous financial year’s apprenticeship levy funds. The apprenticeship service calculates this amount as 25% of:

  • the total amount of levy you declared in the previous tax year
  • with the English percentage applied (the percentage of your employees that live in England)
  • plus the top-up payment of 10% from the government

You cannot transfer more than your 25% allowance in each financial year.

Who can I transfer my apprenticeship levy to?

It is your choice which businesses you transfer levy funds to. Any business can receive a transfer of levy funds, including businesses that pay the apprenticeship levy and those that do not.

All businesses will need an apprenticeship service account to receive a transfer of levy funds.Businesses that pay the apprenticeship levy can choose to either send or receive a transfer of levy funds, but cannot send and receive a levy transfer at the same time.

What can levy transfers pay for?

Transferred funds can only be used to pay for apprenticeship training and assessment up to the funding band maximum.

Transfers can only be used for a new apprentice start. This doesn’t mean the apprentice has to be a new employee. It means you cannot receive transfer funding for an employee who has already started their apprenticeship.

The exception to this is when an apprentice changes employer. The apprentice can continue their apprenticeship with a new employer, funded by a transfer of levy funds.

What is my level of commitment when I transfer levy funds?

Committing funding over multiple years

A transfer of levy funds is not a one-off payment. By agreeing to transfer levy funds to another business, you are committing to pay for a specific apprenticeship over the course of its duration until the apprenticeship has been completed.

As all apprenticeships are a minimum of 12 months and they may start at any point in the year, you’ll be agreeing to transfer funds over multiple financial years.

When agreeing to make a levy transfer, you should think about the amount of levy funds you expect to have available in your account over the course of future financial years.

You cannot send and receive transfer funds at the same time.

You should also consider that by agreeing to support an apprenticeship over multiple years by making a transfer of funds, you will not be able to receive a transfer during that time.

For example, if you agree to support an apprenticeship that is 36 months long with a transfer, you will not be able to receive a transfer during that time.

Making payments on a monthly basis

The levy funds for a transfer will leave your apprenticeship service account on a monthly basis.The funds for your transfer commitments will be prioritised over payments for your own apprentices, so will leave your account first each month.

The duration of an apprenticeship may vary from the estimated number of months advised by the training provider at the start of training and could include breaks in learning, for example if the apprentice needs to go on extended leave.

Delays in start dates or breaks in learning will affect the spending profile of the monthly payments leaving your account.

What am I responsible for when I transfer levy funds?

When you transfer levy funds, you are only responsible for paying for the cost of apprenticeship training and assessment until completion.

You are not liable for any other aspect of the apprenticeship such as the apprentice’s wages or their employment. This is the responsibility of the business receiving the transfer funding.

The business receiving the transfer of funds is bound by the apprenticeship funding rules for how they use the transfer funds and how they employ their apprentice.

How can I transfer levy funds?

If you pay the apprenticeship levy you can transfer your levy funds using your apprenticeship service account.

There are 2 ways of making a transfer:

  1. Pledge and transfer your levy funds so other businesses can apply to you for funding
  2. Make a transfer to a business you know by inviting them to make a connection

How to pledge and transfer levy funds

You can pledge and transfer levy funds from within your apprenticeship service account by selecting ‘Your transfers’ then ‘Create a transfer pledge’.

For each pledge you create, you must specify a maximum amount of money available for that financial year.

You can then choose from 4 optional criteria to reflect your priorities for transferring your levy funding:

  • location
  • sector
  • type of job role
  • apprenticeship qualification level

Each pledge is shown on a public website so that any business can apply to you for levy transfer funding.

Your pledge will show your organisation’s name or you can choose to be anonymous. If you choose to be anonymous, your organisation’s name will only be shared with the business receiving the funds before they accept your offer of funding.

After making a pledge, you’ll be able to:

  • view applications
  • see contact details if you’d like to contact the applicant for more information
  • approve or reject applications

You could choose to work with a partner organisation to promote your pledge opportunities, such as a skills or trade body or a local or combined authority.

How to make a transfer to a business I know

You can transfer levy funds to a business you know if you have their apprenticeship service account ID.

In your apprenticeship service account, select ‘Finance’ then ‘manage transfer connections’.

Enter the other business’s apprenticeship service account ID then wait for them to accept the transfer connection. Then agree the apprenticeship training details and cost when they’ve been added to the service by the business receiving a transfer.

Related Articles