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Apprenticeship levy transfers – What are they and how do they work?

What do we mean by levy transfer?

Well, an apprenticeship levy transfer involves allocating up to 25% of your levy funds to another business or charity. This helps bolster their apprenticeship training budget, ensuring that your levy funds are effectively utilised elsewhere if you don’t need them.

Why would you transfer your levy?

A levy payer might transfer their levy to another business or charity to ensure efficient utilisation of their funds. By doing so, they contribute to the apprenticeship training budget of another entity, preventing their levy from going unused and supporting the development of skilled workers in the broader community. CSR is the name of the game. If you’re not going to use it, you may as well let somebody else do so.

The benefits of transferring your levy

Transferring levy funds offers numerous advantages for your business:

  • It provides an effortless means to support other businesses, charities, or sectors.
  • By contributing to the increase of apprenticeships nationwide, you’re fostering opportunities for both young individuals and current employees.
  • You retain control over where your levy funds are directed, whether it’s investing in local training initiatives, enhancing a specific industry, or supporting a cause close to your organisation’s heart.
  • You can help promote opportunities for underrepresented groups like Black, Asian, or Minority Ethnic (BAME) individuals, showcasing alignment with your company’s Corporate Social Responsibility (CSR).
  • Additionally, it can generate positive publicity for your business, demonstrating your commitment to supporting others.

How much can you transfer?

You have the option to transfer a maximum of 25% of your apprenticeship levy to other employers. This calculation is based on:

  • The levy funds declared in the preceding tax year;
  • The proportion of your workforce located in England;
  • Factoring in the 10% government top-up payment.

However, it’s essential to note that you must not surpass your apprenticeship levy transfer allowance for each fiscal year.

Who can you transfer your levy to?

You have the flexibility to transfer your levy to any business with a digital service account, regardless of whether they contribute to the levy. Additionally, you can transfer funds to a charity affiliated with your business. There’s no limit on the number of transfers you can make, as long as you stay within your levy transfer allowance.

Be aware of the T&Cs

When considering the transfer of apprenticeship levy funds, several key points require attention.

Firstly, the recipient employer must possess a Digital Apprenticeship Service account to receive and manage the funds. It is also the platform through which you conduct the transfer of apprenticeship funds. As of February 2022, employers transferring their levy can also receive funds from another employer while continuing to sponsor apprenticeship programs for another business.

Funds transferred can only be utilised by the recipient employer for apprenticeship training and the End Point Assessment, adhering to the apprenticeship standard funding bands.

The apprenticeship levy transfer mechanism operates on an ongoing basis rather than a single payment. You are essentially financing the entire duration of the apprenticeship program. Consequently, funds will be deducted from your account monthly and transferred to the recipient employer.

How do you do it?

There are two methods to transfer your apprenticeship levy:

1. Utilising levy transfer pledges: You log into your digital account to create a pledge, specifying the maximum funds available for the financial year. This pledge is showcased on pledge website listings, allowing other businesses to apply for it;

2. Connecting directly with another business: You can transfer your levy funds directly from your account to a known business (provided you have their business ID). By establishing a connection with the employer, you can proceed to transfer apprenticeship levy funds.

You can pledge your levy funds here

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