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What the apprenticeship levy transfer rules mean for your business

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The apprenticeship levy can be incredibly beneficial to businesses, boosting essential training and developing apprenticeship programmes. But how do you transfer your unused levy funds to another business?

Why transfer?

Transferring levy funds is a great way to support other businesses by deciding which sectors, skills, or local areas you’d like to fund. It’s completely up to you and your business who, or what, you choose to support - for example you might want to support the financial sector, or fund tech apprenticeships in a particular town in your area.

How much can I transfer?

You can transfer 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.

Which businesses can I transfer the levy to?

It’s totally up to you - any business can receive a transfer, whether they pay the apprenticeship levy or not. Businesses that pay the levy can choose to send or receive levy transfer funds - there are no rules on who can or can’t transfer.

What can the level transfer pay for?

They can only be used for apprenticeship training and assessments, and up to the maximum of the funding band for that apprenticeship.

They can also only be used for a new apprentice. That doesn’t mean they have to be a new employee, just that they can’t already be on an apprenticeship.

There is one exception to this - if an apprentice changes employer, they can continue their apprenticeship funded by a transfer of levy funds.

What do I have to commit to when I transfer levy funds?

A levy transfer is not a one-off payment - it’s a commitment to pay for an apprenticeship for its duration, until it’s completed.

As all apprenticeships are a minimum of 12 months, you have to agree to transfer funds over multiple financial years. You will need to think carefully about the amount of levy funds you expect to have available in your account before you commit to a transfer.

Transferred funds will leave your accounts on a monthly basis, and prioritised over payments for your own apprentices.

What are my responsibilities when I transfer levy funds?

You are only responsible for the cost of the apprentice’s training and assessment until they complete their apprenticeship. You are not responsible for their wages or employment. That is up to the business receiving the funds.

How can I transfer levy funds?

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

There are two ways of making a transfer:

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

Pledging and transferring levy funds

In your apprenticeship service account you can create a pledge and organise a transfer. For each pledge you will need to specify a maximum amount of money available for that financial year.

If you don’t already have a business in mind that you’d like to transfer funds to, you can choose from four optional criteria that reflect your priorities for your levy transfer:

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

Your pledge will then be put on to the website, and you can anonymously post your pledge should you wish to do so.

Once your pledge is live, you can view applications, see the contact details of the applicant, and approve or reject applications.

Can I transfer funds to a business of my choice?

Absolutely - if you know where you’d like your levy funds to go, all you need is their apprenticeship service account ID. In your apprenticeship service account, select ‘Finance’ then ‘manage transfer connections’.

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

Want to know more about how Kaplan can help your business?

Whilst this provides an alternative for large employers who haven’t used up their levy, we would still recommend you utilise the funds where possible in your own business to attract new talent and to reskill or upskill your current workforce.

We’re here to help you and your business with our expertise in delivering tailored training that delivers results. Take a look at our apprenticeship programmes for more information.