Transferring a Levy can seem complicated, but by following this straightforward guide, you will hopefully be confident you can make it happen.

There are many potential rewards from receiving a Levy transfer. With over £3 billion of Levy funds remaining unused last year, numerous organisations are willing to carry this process out.

Besides, there are absolutely no restrictions on who can receive a levy transfer to assist them in recruiting a new apprentice. However, you are held to the same spending rules as the transferring organisation. If you are receiving a transfer from a training provider, you cannot use those funds to pay for training from that organisation. For more information, visit our dedicated Apprenticeship Levy page.

However, if you are an organisation considering transferring your funds, you should consider the process detailed below.

How to transfer a levy

If your organisation has unspent funds, you can transfer up to 25% of your annual Levy contribution to another employer.

Here are the six simple steps to transferring your Apprenticeship Levy:

  • Agree to Terms

    The transferring organisation and the employer receiving the funds must agree on the terms of the transferral. This includes identifying the Apprenticeship Standard they are paying for, the training cost and the expected duration of the apprenticeship. Both parties should note that if the apprenticeship exceeds the agreed period or the transferring organisation’s funds run out, the receiving employer is liable to pay the remaining costs following their funding rules.

  • Set Up an Account

    Once agree to terms, the receiving employer must set up an Apprenticeship Service account.

  • Connect Accounts

    Through the Apprenticeship Service, the transferring employer and the receiving employer must connect accounts. The transferring employer achieves this by following the steps laid out in their Employer Account on the Apprenticeship Service website.

  • Select a Training Provider

    The receiving employer now chooses a training provider to deliver the apprenticeship standard outlined in the previously agreed terms. For help with this, you should visit our dedicated guide on finding a training provider.

  • Approve the Transfer

    Now everything is appropriately set up, all that the transferring organisation has to do is approve the transferral online through their account on the Apprenticeship Service website.

  • Transferring the Levy

    Here’s the easy part! As soon as the Apprenticeship starts, the funds will be transferred monthly by the Apprenticeship Service to the chosen training provider; you don’t have to do a thing.

Things to Note

As a transferring organisation:

  • You can’t be both a transferring and receiving employer, such that you cannot transfer funds if you are receiving funds, and vice versa.
  • Funds for transfer will leave your apprenticeship service account first every month
  • If for whatever reason the apprenticeship stops, your transferal agreement will automatically cancel
  • You can Transfer up to 25% of the previous year’s annual account funds. If you have unspent funds from over 12 months ago, you will not be able to transfer a percentage of them. Going to your apprenticeship service account will show you how much you can transfer.

As an organisation receiving funds:

  • You can only spend transferred funds on the training and assessment of the agreed apprenticeship and within the bounds of the agreed apprenticeship standard
  • If you cancel the apprenticeship for whatever reason, you will automatically stop receiving funds from the transferring organisation, but will not have to pay back any funds for the cancellation
  • In the agreed terms, you can only request an amount equal to the maximum of funding band outlined in the apprenticeship standards.
  • If you receive funding from a training provider, you cannot use those funds to pay for training from that same provider, although you can still use their services for other apprenticeships

Benefits and Risks

There are some risks involved in transferring your Levy funds, and you should be clear about the implications before going ahead with a transferral.

The ability to support affiliated organisations offers your business the opportunity to grow a network of healthy organisations which will, in turn, assist the growth of your own business. If your funds are likely to expire, it seems obvious to want to choose where your funds get spent.

Such companies find that they are more likely to work closely together in the future, and it improves your combined identity for social responsibility. For more information about potential benefits, you should read our guide to the benefits of taking on an apprentice.

However, just like any long-term financial agreement, it is a significant commitment. Given the uncertainty of the economy after COVID-19, it is not easy to discern what funds you will need for yourself in the coming months.

As apprenticeships are developing, there are more and more being delivered with high-level qualifications. In turn, this means the apprenticeship you are supporting is likely to take over a year to complete, such that you are agreeing to continue paying long after your current funds have expired.

In turn, the potential benefits can outweigh the risks. However, funds from either end of the transfer could be severely damaging to all parties involved, including the apprentice.