Why should I transfer my apprenticeship levy?

As an apprenticeship levy payer, you may find that you are not able to spend all of your levy funds each year. If you don’t spend it all within 24 months, it will be returned to the Treasury, and you will have no control over how it is spent.

If you want greater control over how your unused levy is spent, you can transfer up to 25% of your levy funds each year to other businesses to help them with the training and assessment costs of apprenticeships.

By transferring your levy, you are helping to stimulate demand for apprenticeships among small and medium-sized employers (SMEs) who may not be able to afford to pay the employer contribution for training and assessment costs.

Levy transfer is also a great way to contribute towards your Corporate Social Responsibility goals. The transfer of funds, along with any apprenticeship expertise and support you give, will have positive outcomes including relationship building and an increase in apprenticeship jobs available. This will benefit the people, employers and communities in your wider business environment. The return for your business includes increased employee engagement, improved company brand and public trust, and in return increased customer retention and loyalty.

Case Study

East Sussex County Council is a levy payer and has a levy transfer scheme. Here are its top three reasons for transferring apprenticeship levy.

Driving sustainable economic growth by supporting businesses to train and grow their workforce and access talent
Supporting more residents in the county to access training and development
Making best use of resources by utilising ESCC’s unspent levy funding

Large employers that pay the apprenticeship levy can choose to transfer up to 25% of their levy funds each year to other businesses, to pay for their apprenticeship training and assessment.

“We realised after the first year of the apprenticeship levy that we as an organisation were unlikely to be able to spend our entire allocation of levy funding over a calendar year. So, we jumped at the opportunity of being able to support small and medium business in East Sussex with the underspend from our levy. We wanted to be able to use our levy to stimulate growth of the apprenticeship programme within the county.”

Do I have a say in where the funding goes?

Yes, you do. There are two ways to make a transfer. You can make a direct levy transfer to a business you already know, for example one in your supply chain. You can also make an apprenticeship levy transfer pledge.

Full instructions on how to transfer you levy can be found by clicking on the How do I transfer my levy? tile on the righthand menu.

Transferring your apprenticeship levy allows you to support other businesses or charities in your supply chain or in the wider East Sussex economy. It gives you the opportunity to forge greater links with your existing suppliers and will help them to develop the skills of their workforce. As a result, you are likely to experience better collaboration within the supply chain as well as improved information flow, greater reliability, and more agility across the supply chain.

When making a levy transfer pledge, you are able to choose to fund a particular sector, local skills initiative, or a specific location to support critical skills gaps and shortages. For example:

East Sussex priority sectors – you could support apprenticeships in the economic priority sectors across East Sussex. These are construction, engineering, health & social care, land based, visitor economy, and creative & digital
local initiatives – you could fund apprenticeships which support the priorities set out in the Sussex Local Skills Improvement Plan
specific location – you may choose to support the growth of apprenticeships in a town local to your or perhaps across the whole of East Sussex.

How much can we transfer?

Your transfer allowance is calculated as 25% of your previous financial year’s apprenticeship levy funds. The allowance is calculated from:

the total amount of levy you declared in the previous tax year
a top-up payment of 10% from the government.

Levy transfer payments are made monthly and prioritised above your own apprenticeship payments. You must have enough available levy funds to cover the full duration of the apprenticeship.

What can levy transfers pay for?

Levy transfers contribute towards the training and assessment costs of apprenticeship standards only. Transfers apply to new apprenticeship starts, including as well as existing staff, or where the apprentice’s employer or training provider has changed.