Transferring unused funds can benefit your business
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 care sector, or fund 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.
What can the levy 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.
The Pledge of Tomorrow – transfer and train the next generation
Since April 2019, a levy-paying employer can transfer 25% of their levy funds to another employer to be used to train an apprentice. Any unspent monies in levy funds are lost and returned to the Treasury. 375,000 people have been directly supported by the apprenticeship levy scheme since it was launched in 2017, but that number could be so much higher.
We believe that the levy transfer scheme is key in tackling some of the current workforce issues around recruitment and retention and can really help smaller businesses develop their teams and workforce of the future.
What is the apprenticeship levy?
The UK government launched the apprenticeship levy in April 2017 for all employers paying a wage bill of over £3m per year. Eligible employers must pay 0.5% of their payroll each month as a levy tax, with this money used to support apprentices into the workplace.
Since April 2019, a levy-paying employer can transfer 25% of their levy funds to another employer to be used to train an apprentice. Any unspent monies in levy funds is lost and returned to the Treasury.
How do levy transfers work?
Apprenticeships can be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer. Transferred funds are used to pay for 100% of the training and assessment costs of the apprenticeship up to the funding band maximum.
Who can the transferred money go to?
The levy transfer scheme is designed to support SME businesses that are not paying the levy and do not have access to additional levy funding to help develop and train their teams.
How much can be transferred?
The levy-paying employer can transfer 25% of their levy funds to another employer to be used to train an apprentice. This has to be a new apprentice but can be someone already employed by the business receiving the funding.
Can I transfer 25% of my Levy in one lump sum?
At the moment you cannot do this. The levy transfer will mirror the way you pay for your own internal apprenticeships if you have any. This means you will transfer your levy in monthly payments as the apprentices you are supporting via transfer go through their programmes.
Will the receiving organisation know who is funding their Apprenticeship training?
Yes – when the donating employer links to the receiving employer through the apprenticeship Service (AS) to enable the transfer it will display the name of the donating employer and both parties must accept the connection on the AS
What do I need to do to take part?
Contact Paragon Skills who have a team of experts who can guide you through the process and support employers who wish you pledge their levy funds and employers who wish to receive levy funding for apprenticeships.
Is there any collaborative PR planned to raise awareness of this initiative that pledging companies should be aware of and contribute to?
Yes. Once a match is made through Paragon Skills, we will work with both parties to decide what, if, any joint PR they would like.