If your business pays the Apprenticeship Levy, you can transfer some of your levy funds to another employer to help pay for apprenticeship training and assessment.

This can be a useful way to support skills development in your supply chain, sector, or local area, while helping another business access apprenticeship funding.

The rules have changed since this article was originally published, so here's what employers need to know about apprenticeship levy transfers in 2026.

Key takeaways for employers

• Levy-paying employers can transfer up to 50% of their annual transfer allowance to other employers. The allowance is based on the previous tax year's levy payments, with the English percentage applied.
• Any employer can receive a transfer, whether or not they pay the Apprenticeship Levy, provided they have an apprenticeship service account.
• Transferred funds pay for apprenticeship training and assessment, up to the relevant funding band maximum.
• Transfers can fund a new apprenticeship start, including for an existing employee. There is an exception where an apprentice changes employer and continues their apprenticeship.
• You can pledge funds for businesses to apply for, or make a transfer directly to a business you already know.
• Once you approve a transfer, you're committing to fund the apprenticeship for its duration, so you need to make sure you have enough transfer allowance available for future payments.

Why should a business transfer its apprenticeship levy funds?

Transferring levy funds allows large employers to support apprenticeship opportunities beyond their own organisation.

You could choose to support:

• Businesses in your supply chain.
• A particular industry or occupation.
• Apprenticeships in a specific location.
• Businesses that don't pay the Apprenticeship Levy.
• Skills development in areas that align with your organisation's priorities.

The government describes levy transfers as a way for levy-paying employers to support skills development in particular sectors and locations.

For the receiving employer, a transfer can provide funding for apprenticeship training that might otherwise need to be funded through its own apprenticeship budget or other available funding.

How much apprenticeship levy can I transfer?

Levy-paying employers can currently transfer up to 50% of their annual transfer allowance.

The transfer allowance is calculated from the levy declared in the previous tax year, with the English percentage applied. The allowance is recalculated each year, and unused transfer allowance does not carry forward.

The 50% limit replaced the previous 25% limit in April 2024. The 10% government top-up that was previously included in the calculation no longer applies to new funds entering levy accounts from 1 August 2026.

A simple example

Imagine a levy-paying employer has an annual transfer allowance of £100,000.

It could transfer up to £100,000 during that financial year, provided it has enough funds available to meet the monthly payments associated with the apprenticeships it agrees to fund.

The actual amount you can transfer will depend on your apprenticeship service account and the transfer allowance calculated for your organisation.

Who can receive an apprenticeship levy transfer?

Any employer can receive transferred levy funds, including employers that do not pay the Apprenticeship Levy.

The receiving employer needs an apprenticeship service account and must meet the relevant apprenticeship eligibility and funding requirements.

Levy-paying employers can also receive transfer funding. They can send and receive transfers at the same time.

What can transferred levy funds pay for?

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

They cannot be used to pay an apprentice's wages or other employment costs.

The transfer must be agreed and in place before the learner starts the apprenticeship being funded by the transfer.

Can a levy transfer be used for an existing employee?

Yes. The apprentice does not have to be a new employee.

The important distinction is that they must be starting a new apprenticeship. They cannot already have started that apprenticeship before the transfer is agreed.

There is an exception when an existing apprentice changes employer. They can continue their apprenticeship with their new employer using transferred levy funds.

Levy transfer eligibility checklist

A transfer can generally be used when:

• The sending employer pays the Apprenticeship Levy.
• The receiving employer has an apprenticeship service account.
• The learner is starting a new apprenticeship.
• The transfer is agreed before the apprenticeship starts.
• The funds are being used for eligible apprenticeship training and assessment.
• The cost is within the relevant funding band maximum.

A transfer cannot be used to:

• Pay an apprentice's wages.
• Fund an apprenticeship that has already started, except where an apprentice changes employer and continues their programme.
• Pay costs outside eligible apprenticeship training and assessment.
• Exceed the applicable funding band maximum without the receiving employer paying the additional cost.

What happens when I agree to transfer levy funds?

A levy transfer isn't simply a one-off payment.

The sending employer commits to funding the apprenticeship for its duration. Payments are made from the sending employer's apprenticeship service account as the apprenticeship progresses.

Transferred apprenticeships are prioritised before the sending employer's own apprenticeship payments when payments are processed from its account.

This means you need to consider your future levy position before committing to a transfer. You need enough transfer allowance and funds available to cover the agreed apprenticeship for its full duration.

If the sending employer does not have enough funds to make a future transfer payment, the receiving employer may need to use its own available funding or meet any applicable co-investment requirement.

How can I transfer levy funds to another business?

There are two main routes.

Option 1: pledge your levy funds

If you don't have a specific business in mind, you can create a pledge through your apprenticeship service account.

You can set criteria for the types of apprenticeships or businesses you'd like to support, including:

• Location.
• Sector.
• Job role.
• Apprenticeship level.

Your pledge is published on the government’s transfer service, where eligible businesses can apply.

Applications that fully match the criteria can be automatically approved if enough transfer allowance is available. You can also choose to delay automatic approval for up to six weeks to review applications.

Option 2: transfer to a business you know

If you already know which business you want to support, you can make a direct connection.

You'll need the other employer's apprenticeship service account ID. In your apprenticeship service account, go to Finance > Manage transfer connections, enter the other employer's account ID, and wait for them to accept the connection.

You'll then agree the apprenticeship details and cost through the apprenticeship service.

How do I make an apprenticeship levy transfer?

If you're pledging funds

1. Check your transfer allowance in your apprenticeship service account.
2. Decide how much you want to make available.
3. Set your criteria, such as location, sector, job role, or apprenticeship level.
4. Create your pledge through the apprenticeship service.
5. Review applications that don't meet all your criteria or allow matching applications to be automatically approved where applicable.
6. Approve a suitable application.
7. Agree the apprenticeship details and cost with the receiving employer and training provider.
8. Continue funding the apprenticeship through monthly payments for its duration.

If you're transferring to a business you know

1. Check your transfer allowance.
2. Agree the arrangement with the receiving employer.
3. Get their apprenticeship service account ID.
4. Go to Finance > Manage transfer connections in your apprenticeship service account.
5. Invite the employer to connect.
6. The receiving employer accepts the connection.
7. Agree the apprenticeship and training details, including the cost.
8. Approve the transfer through the apprenticeship service.
9. Funding is then paid through the apprenticeship service as the apprenticeship progresses.

How long does an apprenticeship levy transfer take?

There isn't a single standard timescale from starting a transfer to the first payment. It depends on whether you're using a pledge or direct connection, whether the application needs approval, and when the apprenticeship is ready to start.

There are, however, some important deadlines to be aware of.

Once a transfer has been approved, the receiving employer has six weeks to accept the funds. After accepting them, they have three months to link the funding to an approved apprenticeship record. If they don't complete these steps, the transfer funding becomes unavailable and a new transfer may be needed.

For this reason, it's sensible to agree the apprenticeship, provider, funding requirements, and intended start date before setting up the transfer wherever possible.

What does an apprenticeship levy transfer look like in practice?

Imagine a large financial services employer has unused levy funds and wants to support finance skills in its local area.

It could create a pledge specifying that it wants to support accountancy apprenticeships in that area. A local SME could then apply for the pledge to fund an employee starting an eligible accountancy apprenticeship.

The large employer reviews and approves the application. The SME accepts the transfer through its apprenticeship service account and agrees the apprenticeship and training details with its chosen provider.

The transfer then funds the eligible training and assessment costs, up to the relevant funding band maximum. The large employer remains committed to funding the apprenticeship for its duration, while the SME remains responsible for employing the apprentice and the quality of their apprenticeship.

Alternatively, if the large employer already has a relationship with the SME, it could make a direct transfer rather than creating a public pledge.

What are the benefits of transferring levy funds?

For large employers, transferring levy funds can be a way to turn unused apprenticeship funding into wider skills investment.

It can help you:

• Support businesses in your supply chain.
• Develop skills in your local community.
• Support occupations that are important to your sector.
• Create apprenticeship opportunities for smaller employers.
• Strengthen relationships with suppliers and business partners.
• Contribute to wider workforce development.

The receiving business gets access to funding for eligible apprenticeship training and assessment, while the sending employer can direct its transfer allowance towards skills priorities that matter to its organisation or community.

How can Kaplan help with apprenticeship training?

Understanding levy transfers is only one part of setting up an apprenticeship programme.

Kaplan can work with employers to identify suitable apprenticeship programmes, understand funding routes, and support apprentices throughout their training.

If you're considering transferring levy funds or receiving a transfer, our apprenticeship specialists can help you understand the options and identify the right training programme for your business.

Explore Kaplan's apprenticeship programmes