Glossary
Levy transfer
Last updated
Part of our topic guides on Government-Funded Data & AI Training and Data & AI Apprenticeships.
A levy transfer is when an employer that pays the Growth & Skills Levy (formerly the Apprenticeship Levy) sends up to 50% of its unused funds to another business, to pay for that business's apprenticeship training and assessment. It's a direct gift of training budget, not cash, sent from one employer's account to another's.
Why it matters
Plenty of levy-paying employers never spend their whole pot — unspent funds simply expire. A transfer redirects that surplus to a business that actually needs it, often a supply-chain partner, a smaller employer in the same sector, or a charity.
Our view: in our experience this is a chronically underused route into fully funded training. An SME that's never paid a penny into the levy can still have its apprenticeship training covered in full — £0 to the employer — if a larger partner sends a transfer. "We don't pay the levy" doesn't mean "we can't benefit from it"; it's one of two live routes to full funding, alongside government co-investment. Too many SMEs assume the levy system is closed to them and never ask a supplier or client whether they've got funds going spare.
How it works
- Who can send one: any employer with funds in their apprenticeship service account — in practice, any business paying the levy (annual pay bill over £3 million, taxed at 0.5% of pay bill, minus a £15,000 annual allowance).
- How much can be sent: up to 50% of the sending employer's annual funds — raised from 25% on 22 April 2024.
- Who can receive one: any UK employer, commonly a supply-chain partner, an SME, or a charity connected to the sender.
- Where it applies: the levy is collected UK-wide, but a transfer spends English levy funds under England's rules — it pays for apprentices in England. Scotland, Wales and Northern Ireland run their own apprenticeship schemes.
- What it can be spent on: approved apprenticeship training and end-point assessment only — never wages, travel or other employment costs.
- What it can't do: top up an employer's own levy pot beyond the 50% cap, or substitute for co-investment on training the levy doesn't cover.
Funding rules and fund-expiry mechanics sit with the Department for Work and Pensions; a transfer still has to be spent within the receiving employer's normal fund-expiry window, so agree the transfer and start the training promptly rather than banking it.