The Government introduced the apprenticeship levy in 2017 as a scheme to fund apprenticeships. Apprenticeship levy rules state that employers with a payroll of over £3 million must pay a 0.5% levy on their total payroll, offset by a £15,000 government allowance. Levy contributions are paid monthly (alongside National Insurance and tax) through PAYE, and appear in a digital account which can be used by the employer to arrange and pay for apprenticeship training. According to the levy rules, the funds can only be spent on apprenticeship training or end-point assessment. Employers must declare the apprenticeship levy each month from the start of the financial year. After 24 months any unused levy funds expire and return to the government.

Non-Levy paying employers can pay 5% of the apprenticeship course cost, and the government will cover the remaining 95% through the process of ‘co-investment’.

Some large employers that pay the apprenticeship levy can choose to transfer up to 50% of their levy funds each year to other businesses to enable them to pay for apprenticeship training.

The apprenticeship levy paying business can choose which business to transfer levy funds to, this can include to other levy paying businesses. The funds can then be used to pay for apprenticeship trainings and assessment up to the funding band maximum.

Levy transfer funding can only be used for new apprentice starts. The apprentice doesn’t necessarily need to be a new employee, but they cannot have already started their apprenticeship programme in order to receive levy transfer funding.

In order to receive and transfer apprenticeship levy funds, both companies will require an apprenticeship service account.

Woodspeen Training works with a range of larger businesses that transfer their apprenticeship levy funding to other businesses. If you are interesting in transferring your apprenticeship levy or are a business in need of levy transfer speak to the team to find out how we can help.

Currently, you can apply for an incentive payment of £1,000 for new apprentices aged who join your organisation.

To be eligible, the apprentices must either be:

• aged between 16 and 18 years old 
• aged 19 to 25 years old and has an education, health, and care (EHC) plan or has been in the care of the local authority

More information can be found on the Education and Skills Funding Agency page.