How to transfer and obtain transferred apprenticeship levy funds

Published by Skills for Justice

As you are probably aware, since April 2017 employers with a pay bill over £3 million each year must pay the apprenticeship levy.

However not many people are aware that levy payers can support apprenticeships in other organisations by transferring up to 25% of their annual value of funds entering the apprenticeship service account to other employers.

These funds can be transferred to any employer or Apprenticeship Training Agency (ATAs) to support new apprenticeships.

So, how do you transfer your levy funds?

Find an employer who you can transfer your unused apprenticeship funds to. You may already have an employer in mind, if not you might wish to reach out to other employers in your industry, regional partners or a local Apprenticeship Training Agency (ATA)

Decide how much you wish to transfer. Due to the rules released earlier this year, you can transfer a maximum of 25% of your annual fund

What transfers can pay for. Transferred funds will be used to pay for the training and assessment cost of the apprenticeships agreed with the receiving employer.

Points to note:

Funds will be paid monthly for the duration of the apprenticeship
Only levy-paying employers can make a transfer, although any employer can receive and use transferred funds
Both sender and recipient employer need to be registered on the apprenticeship service
Transferred funds can only be used to pay for training and assessment for apprenticeship standards
Most notably, transfers can only be used for new apprenticeship starts

Agree a plan with your levy fund recipient organisation. Once you’ve completed the first three steps, you’ll need to agree on details of the transfer of funds – which apprenticeship standard, how many apprentices and of course, the cost.When you’ve agreed these details then you’ll need to connect with one another on the apprenticeship service portal, the receiving organisation will need to add the apprentice and then you can confirm the transfer.

How can you obtain transferred levy funds?

As they say, every little helps and this is never more true than in the public sector so gaining additional funds to help alleviate your workforce problems is worth the effort.

Find an employer with unused apprenticeship levy credit. Promote your apprenticeship ambitions and encourage others to join you. Start off by speaking to employers you currently work with and work your way out to other employers in your localty. If you are working with a Apprenticeship Training Agency (ATA), speak with them and see if they can help. Remember, if don’t ask, don’t get..

Once you’ve found your funding employer, you need to agree terms and a plan. As mentioned in point four above, you’ll need to agree amount, how the funding will be used and duration.

Update the portal. When you’ve agreed these details then you’ll need to connect with one another on the apprenticeship service portal, the receiving organisation will need to add the apprentice and then you can confirm the transfer.

It’s important to note…

Employers receiving transferred funds will only be able to use them to pay for training and assessment for apprenticeship standards. Transferred funds cannot be used to pay for training and assessment for apprenticeship frameworks.
Levy receiving employers need to take account of state aid rules; the amount of co-investment you would otherwise have had to contribute towards the apprenticeship, if funds had not been transferred. For all starts funded through a transfer before 1 April 2019, 10% of all the funds you receive may be considered as state aid. For starts funded through a transfer on or after 1 April 2019, only 5% may count. This is because the co-investment rate is reducing from 10% to 5% for all new starts from 1 April 2019.
Before agreeing to a transfer, employers should check how much state aid they’ve already received in any three year period, so they don’t go over the limit they’re allowed under ‘de minimis’ funding rules. The limit an organisation is allowed to receive as state aid is €200,000 in any rolling 3 year period.

On the apprenticeship levy portal, funds are backdated to April 2017 when the apprenticeship levy was first introduced, after which funds will be backdated for a maximum of 24 months. Any funds you don’t use will expire 24 months after they enter your apprenticeship service account (i.e. funds entering your account in September 2017 will expire in September 2019). Payments from your account to your training provider always use the oldest funds first.