Apprenticeship levy transfers are a great opportunity to help other organisations grow, especially if you feel you aren’t using all of your levy pot.
As a leading apprenticeship provider, we’re here to help. In this blog by the experts at Damar Training, we’ll explain what an apprenticeship levy transfer is and why organisations might choose to do it.
What are apprenticeship levy transfers?
The apprenticeship levy is a tax on large employers in the UK with a wage bill of over £3 million per year. Levy payers are able to use this levy pot to fund apprenticeship training within their organisation. However, any unused levy expires after 24 months and is lost to HMRC. This time frame will be reduced to 12 months from August 2026.
Discover some ways that you can use the apprenticeship levy effectively by reading our detailed guide.
An apprenticeship levy transfer allows levy payers to transfer up to 50% of their levy funds to businesses, charities or other organisations to pay for apprenticeship training. It cannot be used for other types of training or for any other costs associated with employing an apprentice, such as their wages.
Why do organisations transfer their levy?
Organisations might transfer their apprenticeship levy for a number of reasons, such as:
- To prevent funds being lost to HMRC: Levy funds must be used within 24 months – if not, they will expire
- To support their sector: Employers can help to support apprenticeship training in organisations with similar goals and values
- To support supply partners: Large companies can transfer their funds to suppliers or partners
- To support the local community: Apprenticeship levy transfers are a great way to give back and support local businesses.
Why might businesses take a levy transfer?
If you’re a small or medium-sized enterprise (SME) that does not pay the UK apprenticeship levy, but wants to fund apprenticeship training for your employees, taking a levy transfer might be for you.
For SMEs, apprenticeships are fully funded by the government for apprentices aged under 22, with 95% funding available for apprentices aged 22 and over. Taking a levy transfer enables SMEs to cover the 5% costs associated with older apprentices, meaning that they can access completely free apprenticeship training for an apprentice of any age.
Levy transfers can also be made to other levy payers who have used up all of their levy pot.
How do apprenticeship levy transfers work?
The levy-paying employer can make a pledge, enabling other businesses to apply for the funding or they can make a transfer to a specified business. Once the necessary steps are completed, the money then automatically flows monthly to cover the costs of the apprentice’s training. Here is a step-by-step breakdown:
How it works for the levy-paying employer: Making a pledge
- Pledge and transfer your levy funds by going to ‘Your transfers’ within your apprenticeship service account and selecting the ‘Create a transfer pledge’
- You can specify the location, sector, type of job role and qualification level you are willing to fund
- Applications that meet the set criteria will automatically be approved, or the levy-paying employer can choose to manually review and approve applications.
How it works for the levy paying employer: Transferring to a specific business
- Transfer your levy funds to a specific business by going to ‘Finance’ within your apprenticeship service account and selecting ‘Manage transfer connections’
- Enter the business’ apprenticeship service account ID and wait for them to accept the transfer connection
- Once the business has added the apprenticeship training details and cost, you can then agree on the transfer.
How it works for the receiving employer
- Apply by finding a pledge on the government website or connect to a levy payer through an intermediary (Damar Training can often connect businesses looking for transfers with levy payers)
- Complete the necessary details about the apprenticeship training and costs within your apprenticeship service account, which will then be approved by the levy payer.
You can find more details on the official GOV website, where they explain how to transfer your apprenticeship levy to another business.
Do apprenticeship levy funds expire?
Apprenticeship levy funds expire 24 months after they enter your account (this will change to 12 months from August 2026). After this point, your unspent funds are returned to HMRC.
This system is designed to encourage employers to invest in and create apprenticeships, ensuring that funds are being utilised for the development of skills and business growth. To avoid losing funds, employers should closely monitor their apprenticeship service accounts and ensure that they are spending their levy or transferring it to another employer.
Discover the power of apprenticeships with Damar Training
Hopefully, this blog has taught you all about apprenticeship levy transfers. Transferring apprenticeship levy funds can make a positive difference to other businesses within your sector, supply chain or local community. If you’d like to be put in touch with businesses looking for levy transfers, let us know.
With 45 years of experience, we’ve been passionately delivering apprenticeships to organisations across England. Work with us here at Damar Training and discover just how powerful apprenticeships can be.