6 August 2018

Companies can transfer 10% of their levy pot to others

From April 2018 employers who pay the apprenticeship levy will be able to transfer apprenticeship funds to other organisations that are outside of their group of connected companies.

Employers can transfer a maximum of 10% of annual funds. This is worked out from the total amount of levy declared, with the English % applied, plus the 10% government top-up payment. This means that it is 10% of the money which goes into the employer's digital account.

These funds will be used to pay for the training and assessment cost of the apprenticeships agreed with the receiving employer and will be paid monthly for the duration of the apprenticeship. The transfer of funds will be managed via the employer's digital account.

Only levy-paying employers can make a transfer. Any employer can receive and use transferred funds, but they have to be registered on the apprenticeship service. A transfer can only be used to pay for training and assessment for apprenticeship standards.

For more information please click here.

AELP issued a summary as ‘top 5 facts about transfers':

What can I transfer as a levy-paying employer?
You can transfer a maximum of 10% of your annual funds, which will be calculated from the total amount of levy declared during the previous tax year.

Who can I make a transfer to?
You can make a transfer to any employer, including employers who pay the apprenticeship levy and Apprenticeship Training Agencies (ATAs). If you send a transfer, you cannot also receive a transfer.

What can the transfer be used for?
You can transfer funds to another employer to pay for the costs of training and assessment for their apprenticeships. These must be for apprenticeship standards. Transfers cannot be used for apprenticeship frameworks.

Why should I consider making a transfer?
By making a transfer you could support other businesses. For example, by supporting the skills of your supply chain's workforce, your own business is also likely to benefit. You could help a charitable organisation or support the skills base within your local economy.

What do I need to think about to prepare for transfers?
If you'd like to start preparing for transfers, read the short blog on the types of activities you could be doing now to get ready.

Source: ESFA Digital