Transferring unused apprenticeship funds to other employers

Employers: want to know more about making a transfer on the apprenticeship service?
Read the guidance here #ApprenticeshipServicehttps://t.co/W16YraAYJz pic.twitter.com/qBO5jOsvNh

— ESFADigitalServices (@ESFAdigital) July 8, 2019

Information about transferring funds to other organisations in the apprenticeship service.

How will transferring funds work

Employers who pay the apprenticeship levy and have unused apprenticeship funds can find employers who want to receive a transfer in a number of ways. For example, you could:

• work employers you currently work with
• get in touch with other employers in your industry
• get in touch with an Apprenticeship Training Agency (ATA)
• work with regional partners

How much can be transferred

From 1st April 2019, levy-paying employers can transfer a maximum amount of 25% of their annual funds. They can make transfers from their apprenticeship account to as many employers as they choose.

The apprenticeship service calculates this amount by:

• the total amount of levy declared in the previous tax year
• with the English percentage applied
• plus the payment of 10% from the government

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.

Sending and receiving employers need to know that:

• funds are paid monthly for the duration of the apprenticeship
• only levy-paying employers can make a transfer
• any employer can receive and use transferred funds
• sending and receiving employers have to be registered on the apprenticeship service
• a transfer can only be used to pay for training and assessment for apprenticeship standards
• transfers can only be used for new starts

How to start a transfer

The sending employer and the receiving employer need to first agree the details of the transfer of funds; for example, which apprenticeship standard, how many apprentices, the cost.

Once both employers are registered on the apprenticeship service the following must be done in their accounts to complete a transfer:

• connect with each other
• receiving employer to add the apprentice details
• confirm the transfer

Employers who are transferring funds

Before you make a transfer from your apprenticeship account, make sure that you:

• have enough funds to transfer to another employer
• have a clear understanding of the forecasted cost to you, which will cover the duration of the apprenticeship you’ve agreed to fund through a transfer
• understand you will be funding the total cost of their apprenticeship and not just the co-investment
• agree with the employer who is receiving the transfer, details of the apprenticeships you’re funding
• are aware of the funding rules around transferring apprenticeship funds

You should also know:

• you can’t transfer funds to another employer if you currently receive a transfer
• if you’re currently transferring funds to another employer, you can’t receive transferred funds to pay for your apprenticeships
• transfer payments will leave your apprenticeship service account first, each month
• if the apprenticeship stops, your transferred payments will stop as well

Employers who want to receive a transfer

If you want to receive a transfer from another employer you must be aware of the following:

• you can only use the transferred funds for apprenticeship training and assessment
• transferred funds can only be used for apprenticeship standards
• you’ll need to create an account on the apprenticeship service to receive the transfer and pay for apprenticeship training
• you’ll need to sign an agreement with the Education and Skills Funding Agency (ESFA)
• transfer payments will be made monthly from the sending employer to your apprenticeship account
• if the apprenticeship stops then the funding will stop too
• you won’t have to pay any funds back to the sending employer
• if the employer sending you funds runs out of funds, you must make a 5% contribution to the cost of apprenticeship training and the government will pay the remaining 95% (this is called co-investment)
• a transfer can fund up to the funding band maximum of a standard, if the cost of training is more, you’ll have to pay the difference to the training provider
• if a training provider transfers funds to you, they cannot deliver the training for that funded apprenticeship
• funding rules around transferring apprenticeship funds

State aid

Employers need to take account of state aid rules when receiving funds from other organisations.

A percentage of all the funds you receive as a transfer may be considered as state aid. This represents 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 1st April 2019, 10% of all the funds you receive may be considered as state aid. For starts funded through a transfer on or after 1st April 2019, only 5% may count. This is because the co-investment rate is reducing from 10% to 5% for all new starts from 1st April 2019.

Before accepting a transfer, employers should check how much state aid they’ve already received in any 3 year period, so they don’t go over the limit they’re allowed under ‘de minimis’ funding rules – see guidance on ‘de minimis’ support. The limit an organisation is allowed to receive as state aid is €200,000 in any rolling 3-year period.

What is state aid?

State aid is any advantage granted by public authorities, through state resources on a selective basis, to any organisations that could potentially distort competition and trade in the European Union (EU).

So that you do not go over the allowed limit of €200,000 for state aid in any 3 year period, you should check:

• how much state aid you’ve already received
• if you’re part of a connected organisation, how much combined total state aid you have received

Published 12 February 2018 
Last updated 13 March 2019 + show all updates

1. 13 March 2019 Updated page to reflect changes for 2019.
2. 20 February 2019 We have added that the maximum amount levy-paying employers can transfer will be increasing from 10% to 25% in April 2019.
3. 27 June 2018 We have added that levy-paying employers will be able to transfer unused apprenticeship funds to as many employers as they choose from early July 2018.
4. 12 February 2018 First published.