What is an apprenticeship levy transfer?

Benefits of an apprenticeship levy transfer

Transferring levy funds comes with many benefits for your business:

• It’s an easy way to support other businesses, charities or sectors.
• You’re helping boost the number of apprenticeships across the UK, providing opportunities for young people or existing employees.
• You have control over who receives your levy funds - you can invest in training for your local area, in upskilling a particular industry or a cause you’re supporting.
• You can help create opportunities for those who need them most, such as Black, Asian, or Minority Ethnic (BAME) and align with your company (Corporate Social Responsibility) CSR or transferring funds to the NHS.
• It can also create positive PR for your business, as you’re seen supporting others.

Apprenticeship levy transfer allowance

You can transfer up to 25% of your apprenticeship levy to another employer. This is calculated from:

• The amount of levy funds declared in the previous tax year
• The percentage of employees you have working in England
• With the 10% government top-up payment applied

You cannot exceed your apprenticeship levy transfer allowance for each financial year.

What type of business can I transfer my levy to?

You can transfer your levy to any business, as long as they have a digital service account. The business receiving your funds does not have to be paying the levy to receive a transfer.

You can also transfer funds to a charity that’s connected to your business. You can make as many transfers as you’d like, as long as you do not exceed your levy transfer allowance.

Apprenticeship levy transfer rules

When it comes to the transfer of apprenticeship levy funds, there are a few things you need to keep in mind.

Firstly, the employer receiving your levy transfer must have a Digital Apprenticeship Service account in order to receive funds. It is through this account that you’d also transfer apprenticeship funds. As of February 2022, employers transferring their levy can also receive funds as a transfer from another employer, while still paying for another business’ apprenticeship programmes.

The employer receiving the funds can only spend your levy on apprenticeship training and the End Point Assessment within the apprenticeship standard funding bands.

The apprenticeship levy transfer scheme isn’t a one-off payment. Instead,you are paying for the duration of the programme. The funds will leave your account each month and be transferred to the employer receiving the funds.

How to transfer apprenticeship levy funds

There are two ways to transfer your apprenticeship levy :

• through levy transfer pledges
• connecting another business in your account.

To pledge your apprenticeship levy funds, you log into your digital account and make a pledge from there. You also need to state the maximum funds available for the financial year. Your pledge will then be visible on pledge website listings for other businesses to apply.

To transfer your levy funds to a business you know, you can do this directly from your account (as long as you have their business ID). You then make a connection with the employer and transfer apprenticeship levy funds.

Receiving a levy transfer for a small business

If you’re an SME business or a levy paying organisation with a limited levy pot, you can train your employees through co-investment or through a levy-transfer scheme.

Funding rules mean that SMEs or levy-payers going into co-investment usually have to pay 5% of the cost of apprenticeship training.

The government will contribute funding to a maximum of 10 apprentices per non-levy paying business. Any apprenticeships that are required above this limit will need to be funded through a levy transfer from a levy paying organisation.

Lifetime are working with levy paying employers to generate levy-transferred funding that can go directly to you to support your apprentices to pay for their training and assessment.

Looking for more information on levy transfers? Talk to us or read more on funding information for non-levy payers.