Glossary
Levy transfer
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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.
A transfer has two sides, and the deal looks different from each. Here's both.
The sending side: surplus that would otherwise expire
Any employer with funds in its apprenticeship service account can send one. In practice that means any business paying the levy: annual pay bill over £3 million, taxed at 0.5% of the pay bill, minus a £15,000 annual allowance. Plenty of those employers never spend their whole pot, and unspent funds simply expire back to government.
A transfer redirects that surplus before it disappears. The cap is 50% of the sending employer's annual funds, raised from 25% on 22 April 2024. Common recipients are a supply-chain partner, a smaller employer in the same sector, or a charity connected to the sender. For the sender, the alternative to transferring is usually not "spend it later". It's losing it.
The receiving side: full funding without ever paying in
Any UK employer can receive a transfer, and this is the half we think is chronically underused. An SME that has never paid a penny into the levy can 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": a transfer is 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 have funds going spare. Asking is the whole move.
What the money can and cannot do
- It can buy: approved apprenticeship training and end-point assessment only. Never wages, travel or other employment costs.
- Where it applies: the levy is collected UK-wide, but a transfer spends English levy funds under England's rules, so it pays for apprentices in England. Scotland, Wales and Northern Ireland run their own apprenticeship schemes.
- It cannot: top up an employer's own levy pot beyond the 50% cap, or substitute for co-investment on training the levy doesn't cover.
The clock on it
Funding rules and fund-expiry mechanics sit with the Department for Work and Pensions, and 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: a gift on a timer is only generous if it gets used.