APPRENTICESHIP LEVY TRANSFERS

 

Employers who pay the apprenticeship levy can support apprenticeships in other organisations by transferring a percentage of their apprenticeship fund to other employers.
 

From April 2019

The government recently announced the transfer allowance available to employers will increase from 10% to 25%. This change has now been implemented and the increased transfer allowance percentage will apply to transfers made after 23 April 2019.
 

These funds can be transferred to any employer, including smaller employers in their supply chain, and Apprenticeship Training Agencies (ATAs), to help widen participation in apprenticeships and widen opportunities.
 

Who can you transfer funds to?

Employers who want to transfer funds can find organisations who want to receive a transfer in a number of ways including:
 

• Work with an organisation in your supply chain.
• Get in touch with other employers in your industry.
• Get in touch with an Apprenticeship Training Agency (ATA).
• Work with regional partners.
   

What is your transfer allowance?

Your transfer allowance will be calculated from the total amount of levy declared to HMRC in the 2018-2019 financial year, with the English percentage applied, plus the 5% 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.
 

How does transferring work?

Levy payers can see their organisation’s annual transfer allowance in their apprenticeship service account.

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 etc.

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 that you will be funding the total cost of their apprenticeship and not just the 5% 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 which will be published at a later date.
   

Key points to note

 

• If you currently have an apprentice funded by a transfer, you can’t transfer funds to another employer.
• If you are currently transferring funds to another employer, you cannot receive transferred funds to pay for your apprenticeships.
• Once a transfer is made you cannot refund it to the sending employer.
• Transfer payments will be made monthly from your apprenticeship account.
• 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 will need to create an account on the apprenticeship service to receive the transfer and pay for apprenticeship training.
• You will 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.
   

State aid

You need to know that 10% of all the funds you receive as a transfer from another employer count as state aid. Therefore, you should check:

 

• How much state aid you have already received in any three year period, so you don’t go over the €200,000 limit you’re allowed.
• If you’re part of a connected organisation, you’ll need to find out the combined total of state aid you’ve received for that three year period.

Watch this video to learn more or contact us: