Transferring apprenticeship service levy funds

ESFA have today (4 Apr) updated information about transferring funds to another organisation in the apprenticeship service.

From April employers who pay the apprenticeship levy will be able to transfer apprenticeship service funds to other organisations to pay for their apprenticeship training and assessment.

Transfers will give employers more flexibility and help larger employers to support smaller employers in taking on more apprenticeships.

For the first phase, employers can transfer up to 10% of their annual funds to one other employer.

The number of employers they can make a transfer to will increase over time and after user feedback from the first phase.

Key dates:

• Levy-paying employers who use the apprenticeship service will be able to see their transfer allowance at the end of April (the 10%).
• They will be able to make a transfer to one other organisation from May.
• The receiving organisation will be able to start adding apprentice commitments from May.
• For these new commitments, training providers can then be paid from June.

Employers who want to transfer funds can find employers who want to receive a transfer in a number of ways, for example:

• work with an employer in your supply chain
• get in touch with employers in your industry
• get in touch with an Apprenticeship Training Agency (ATA)
• work with regional partners

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.

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.

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.

Transfers are being brought in as a flexibility in the system in response to employer demand and should lead to the creation of more apprenticeship starts, allowing larger employers to spend some of their funding to help upskill the workforce of another employer, perhaps in their supply chain.

Levy-paying employers will be able to transfer funds to any employer and will have to agree the apprenticeships that are being funded by a transfer with the employer receiving the funds. Employers receiving transferred funds will only be able to use them to pay for training and assessment for apprenticeship standards and the transfer must cover the cost in full.

So what do you need to think about now to prepare for transfers as a levy-paying employer?

1. Consider how much funding you will be able to transfer

You can transfer up to a maximum of 10% of your annual funds, which will be calculated from the total amount of levy declared during the previous tax year. Read more information about how transfers are calculated here.

2. Consider the total costs of any apprenticeships you would like to support

As the sending employer you are responsible for managing the amount of funding that you transfer and for funding the whole cost of the apprenticeships you are supporting, up to the funding band maximum.

3. Find a receiving employer

This can be any employer. You might want to choose an employer in your supply chain or sector, or perhaps you would like to support a charitable organisation or help your local economy. It is your choice.

The receiving employer can be a levy-paying employer as long as they are not sending any transfers. If you send a transfer you cannot also receive a transfer.

 4. Have detailed conversations with your receiving employer

Discuss the number and type of apprenticeships that you could fund with a transfer. Read Take on an apprentice for general information about employing an apprentice and use Find apprenticeship training to search for different types and levels of apprenticeship.

5. Agree the details in advance with the receiving employer before starting to set up the transfer on the apprenticeship service

To send and receive a transfer, both employers will need to have an apprenticeship service account. However, it is important that the receiving employer doesn’t rush into registering for an account as they will need to have lots of details in place first.

For instance, a receiving employer shouldn’t register on the apprenticeship service for a transfer until they have agreed the apprenticeship standard and their costs with the employer sending the transfer.