Levy: Transfer 10% of your funds

Apprenticeship Levy: Pay it forward and transfer 10% of your funds to your supply chain

Employers whose payroll amounts to over £3 million per year must contribute to the government’s apprenticeship levy. In order to recoup the funding – which amounts to 0.5% of total payroll – businesses need an apprenticeship development plan of their own.

But, how can organisations claim funding if they are currently in the process of creating and implementing or increasing their apprenticeships training programme?

From May 2018, there will be a solution which can help. Employers can fund apprenticeships in one other organisation, by way of a transfer, and in turn reclaim some of the apprenticeship levy which they are entitled.
How does it work?

Under the new rule;

  • Employers can transfer up to a 10% share of their annual levy funding to another employer.
  • Only one external organisation can be funded by the transfer, although this quota is set to increase in time.
  • There are no restrictions on which UK employer you make the transfer to, so long as they are registered for the apprenticeship service.
  • Transferred funds will be used to pay for the training and assessment of apprenticeship standards (not the old frameworks).
  • The transferring employer is committing to funding the apprenticeship for the entire duration for the programme.


What are the benefits?

Quite simply – if you don’t use it, you will lose it.

The transfer option offers levy paying employers a convenient way of utilising part of their funding. They can use transferring apprenticeship levy funds as a way of supporting smaller employers in their supply chain. By upskilling its supply chain, a firm will be one of the ultimate beneficiaries, and it shouldn’t be underestimated how important this can be from a corporate social responsibility standpoint, too. The apprenticeships levy transfer option allows you to ‘give back’ to your supply network, and your industry.
What next?

Using the transfer option requires an important planning phase. The funding must cover the duration of the apprenticeship training cost for another organisation – therefore forecasting the cost is imperative to ensure sufficient levy funds are available for that time period.
SR Education can help employers plan and forecast their levy spending and determine additional funds which could be transferred to third parties if necessary.

To discuss how to optimise your apprenticeship levy funding call us on 01949 20976 or email the Engagement Team


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