Why transfer your apprenticeship levy funds?

As a levy-paying employer, you can choose to transfer up to 25% of your levy funds each year to other businesses, to pay for their apprenticeship training and assessment.

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

You can, for example, support the care industry across England or fund apprenticeships in your local supply chain or even support any apprenticeships in a particular town or city.

The businesses and apprenticeships you support 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 to which businesses you transfer levy funds. Any business can receive a transfer of levy funds, including businesses that pay the apprenticeship levy and those that do not.

From February 2022, if you are currently a sending employer (with existing transfer commitments) you will also be able to receive funds, in order to take on new apprenticeship starts, from another levy-paying employer.

You’ll need an apprenticeship service account to receive the transfer of funds.

The following steps in our  Setting up the Digital Apprenticeship Service (DAS) account guide.

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 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.

Mark Botha

Chief Executive, Paragon Skills

The partnerships we have forged have allowed Paragon Skills to back the small and medium-sized enterprises [SME] community, ensuring access to new talent and providing opportunities to succeed in the digital age, regardless of background.

SMEs are the life-blood of the local economy and we are committed to helping as many as possible to not just recover from COVID-19, but adapt and thrive, preparing their workforce for the future.

How can I transfer levy funds?

If you pay the apprenticeship levy you can transfer your levy funds using your Digital 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

You can use our ‘How can I transfer levy funds’ guide which will show you how to do this in more detail.

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 Digital 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 on the apprenticeship training details and cost when they’ve been added to the service by the business receiving a transfer.

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 remain anonymous, your organisation’s name will only be shared with those businesses where you have accepted their application.

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.

Making payments on a monthly basis

The levy funds for a transfer will leave your Digital 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.

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

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 Is 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 should also consider that by agreeing to support an apprenticeship this may be over multiple funding years.

From February 2022 you will be able to receive funds from other employers to help fund new apprenticeship starts, even if you have existing transfer commitments.

Get in touch

If you are unsure about transfers and would like to talk to one of our Levy fund experts, please contact us today on 0800 783 2545, and they can talk this over with you.

Paragon Skills is currently rated as an Ofsted Grade 2 Good provider with aspirations to achieve Grade 1 Outstanding.

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