Organisations who pay into the Apprenticeship Levy have access to a ringfenced fund that they can use for apprenticeship training. Savvy employers use these funds to grow their team or upskill existing employees, but many will have funds left over.
These unused levy funds are at risk of expiring, but could be used to help others access apprenticeships.
To share opportunity and maximise the number of apprenticeships funded by the levy, employers can transfer a percentage of their unused Apprenticeship Levy funds to other organisations.
This blog will give you an overview of how the process works, who is eligible for levy transfers, and how Baltic Apprenticeships can help facilitate your levy transfer.
How much can I transfer from my Apprenticeship Levy funds?
Employers can transfer up to 25% of their annual Apprenticeship Levy funds.
This amount is calculated by taking the total amount of levy declared in the previous tax year, with the English percentage applied and the 10% government top up added. This allowance is calculated every tax year.
To make a transfer, you will need to have sufficient funds to cover the costs for the duration of any apprenticeship programmes that have been agreed.
If you pay into the Apprenticeship Levy, you can transfer unused funds to any other organisation you choose. You may wish to gift your levy funds to employers that you currently work with closely, or who share your values and goals.
The employer receiving a levy transfer should not currently be transferring their own funds to others. They will also need to take into account any state aid they have received in the last 3 years, as a percentage of the levy transfer will count towards their state aid limit.
Transferred levy funds can only be used to pay for the training and assessment costs for apprenticeship standards. These apprenticeships need to be new starts, except where the apprentice is changing employer and there is an agreement to continue the apprenticeship via a transfer of funds.
A levy transfer should cover the full training and assessment costs for an apprenticeship programme. At the moment, it isn't possible to split the costs of an apprenticeship between multiple levy transfers.
How do I Transfer Levy Funds?
Many local authorities run levy transfer schemes for businesses in their area, matchmaking employers who have levy funds to spare with organisations who need apprenticeship funding. Training providers, such as Baltic Apprenticeships, can also help connect employers looking to share opportunity through a levy transfer.
Once you've decided on an organisation to share your levy funds with, the process is relatively simple.
Both parties will need to agree on the details of the transfer, including how many apprenticeships will be paid for and which apprenticeship standards they will be enrolled on.
Funds can then be transferred online using the digital apprenticeship service. Once the apprenticeship starts, payments will be made to the receiving employer on a monthly basis for the duration of the apprenticeship.
Find out More:
If you'd like to know more about the Apprenticeship Levy, or to enquire about arranging a levy transfer, please get in touch with our friendly and knowledgeable team.