Apprenticeship Levy Transfers for Small Employers

Apprenticeship levy transfers let small employers in England access another employer’s levy funds to pay eligible apprenticeship training and assessment costs. You don’t need to pay the levy yourself, but you still cover wages and other employment costs.

For a small business, that can remove a substantial training bill without changing your responsibility to employ, supervise and support the apprentice.

The application runs through the Apprenticeship Service, and funding must be arranged before the training it will support begins.

Key Takeaways

• Levy-paying employers can transfer up to 50% of their annual levy funds to other employers, subject to the transfer allowance calculation.
• Transfers cover eligible training and assessment costs up to the apprenticeship’s funding-band maximum, rather than providing cash for wages.
• Receiving employers need an Apprenticeship Service account, an agreed apprenticeship and an approved transfer before the funded training starts.

How Levy Transfers Work in England

A transfer allows a levy-paying employer to support apprenticeship training at another business. The recipient can be a smaller employer that doesn’t pay the levy.

The sending employer commits funding through the Apprenticeship Service. The receiving employer then uses that support towards agreed apprenticeship training and assessment.

Who provides the funding?

The Apprenticeship Levy applies to employers with an annual pay bill above £3 million. It charges 0.5% of the pay bill, with an annual levy allowance of £15,000, as explained in the government’s Apprenticeship Levy payment guidance.

Employers can transfer up to 50% of their annual levy funds. Their allowance depends on the previous tax year’s declared levy and the English percentage, rather than simply half their account balance.

Why the England distinction matters

Although the levy operates across the UK, this transfer process concerns apprenticeship funding in England. Scotland, Wales and Northern Ireland have separate apprenticeship arrangements.

A UK-wide business therefore needs to distinguish its levy liability from the funding system supporting a particular apprenticeship. Paying the levy doesn’t mean every apprentice across all four nations follows the same funding route.

What Transferred Funding Covers

A transfer can pay 100% of eligible apprenticeship training and assessment costs, up to the relevant funding-band maximum. However, it doesn’t pay every cost associated with taking someone on.

Training and assessment

Each apprenticeship standard has a funding band that limits how much public apprenticeship funding can cover. The employer and provider agree a training and assessment price within the applicable rules.

If that price exceeds the band maximum, the employer pays the difference. A transfer doesn’t remove the cap or turn unrelated workplace courses into eligible apprenticeship training.

The agreed programme should develop the knowledge, skills and behaviours required for the occupation.

Costs your business still carries

You remain responsible for the apprentice’s wages, including paid time spent on required training. Your business must also budget for supervision, equipment and the practical costs of providing the job.

English and maths support and other additional payments have separate funding arrangements. They aren’t part of the transferred training and assessment budget.

A fully funded training place can still require a significant employer budget because wages and supervision remain your responsibility.

That distinction matters when deciding how many apprentices your business can support through completion.

Which Small Employers Can Receive Funding?

You don’t need a £3 million payroll or your own levy pot to receive a transfer. The receiving employer needs an Apprenticeship Service account and must meet the relevant apprenticeship funding requirements.

A transfer can support a new recruit or a new apprenticeship for someone already employed by your business. Existing staff must still need the occupational training involved.

Prior qualifications don’t automatically rule someone out. However, an apprenticeship must provide substantial new learning, and the provider must assess relevant prior learning when planning the programme and price.

Funding also depends on a willing sending employer. A transfer isn’t an automatic entitlement simply because your business is small.

Senders may prioritise particular locations, sectors or skills needs through their funding pledges. Your application therefore needs to explain the occupation, the training requirement and the proposed start date clearly.

Choose the apprenticeship around a genuine job requirement. Funding is useful only when the employee can learn and practise the skills the programme teaches.

How to Apply for Apprenticeship Levy Transfers

Start with the role your business needs, then identify the appropriate apprenticeship standard and training provider. This gives a potential funding partner a clear proposal rather than an open-ended request.

Agree the programme and find a sender

Your proposal should establish the apprenticeship standard, number of apprentices, anticipated start date and training and assessment costs.

Employers can arrange a transfer directly with a levy-paying business or apply through an advertised funding pledge. The government’s levy transfer guidance explains the available routes.

A direct relationship might involve an existing business contact. A pledge application instead lets you approach funding that a sender has offered against stated priorities.

In either case, explain how the apprenticeship supports a real vacancy or an employee’s progression into skilled work.

Set up the account and approve the record

Create your Apprenticeship Service account and complete the employer agreements needed to manage apprenticeship funding.

Once the sender approves support, accept the transfer and link it to the approved apprenticeship record. That record connects the commitment to the apprentice and training programme.

Your provider can support the administration, but your business remains responsible for its employer commitments. Agree who will manage account tasks so approvals don’t sit unattended.

The transfer must be arranged before the apprentice starts the training it will fund. Build approval time into recruitment and training plans.

The Deadlines and Longer-Term Commitment

Transfer approval has two important deadlines. After approval, the receiving employer has six weeks to accept. After acceptance, it has three months to link the funding to an approved apprenticeship record.

These are separate stages. An approved offer alone doesn’t complete the process or attach funding to a learner.

The sender commits to the agreed training and assessment through completion. Apprenticeships can run beyond one financial year, so the arrangement needs to reflect the whole programme.

Funding moves through the Apprenticeship Service rather than arriving as an unrestricted payment into your business bank account.

Keep the training timetable, agreed price and account record aligned. If the apprentice’s circumstances change, manage the record with the provider so payments reflect the actual programme.

Clear ownership of the account helps prevent a funding offer being lost through a missed acceptance or an incomplete record.

What Changed in August 2026?

Funding explanations written before 1 August 2026 can give an incomplete picture of the employer contribution.

For apprenticeship starts on or after that date, a non-levy employer taking on an apprentice aged 25 or over pays 5% of eligible training and assessment costs through co-investment. Government pays the remaining 95%, within the funding-band limit.

For levy-paying employers with insufficient funds, the equivalent contribution for apprentices aged 25 or over is 25%, with government paying 75%.

Government support fully funds eligible training costs for under-25s where the applicable conditions are met. Age at the start and the programme’s start date therefore matter.

The government’s apprenticeship funding rules collection separates the rules applying to different periods and programmes.

For a small employer, compare a transfer with the funding already available for that apprentice. If government already covers eligible training costs, a transfer may not reduce your training bill further. Neither route removes wage costs.

How Transfers Differ From Our Wage Credit Proposal

Existing levy transfers support training and assessment. Our proposed Apprenticeship Wage Credit addresses a different cost: employing a young apprentice.

Our plans for jobs and skills include a proposed 30% wage credit for eligible employers taking on apprentices aged 16 to 18. The proposed conditions include an employer wage bill below £3 million.

That is a proposal for government, not an existing payment available through the levy-transfer system. Businesses shouldn’t include it as secured income when budgeting an apprenticeship.

We want employers to develop British skills and offer routes into lasting employment. For smaller firms, training fees and the cost of supporting a beginner both affect whether taking on an apprentice is affordable.

Those costs need separate answers. An approved levy transfer can help with eligible training now; a proposed wage credit must remain separate from the funding arrangements already in force.

Frequently Asked Questions

Can I use a transfer for an existing employee?

Yes, a transfer can support a new apprenticeship for an existing employee who needs the training. The programme must meet funding requirements and provide substantial new occupational learning. It cannot simply reimburse routine work or training the employee has already completed.

Does the apprentice have to be aged 16 to 18?

No. That age range belongs to our proposed wage credit, rather than being a general levy-transfer restriction. Apprenticeship funding can support adult learners, subject to the relevant eligibility rules. Age can, however, affect the government funding available without a transfer.

Is an approved transfer a payment towards wages?

No. The transfer funds eligible apprenticeship training and assessment through the Apprenticeship Service. You continue paying the apprentice’s wages and providing paid training time. Treating the transfer as payroll support would leave a gap in your employment budget.

Build the Funding Around a Real Job

Apprenticeship levy transfers can make occupational training more affordable for small employers in England. Their practical value depends on an approved programme, timely acceptance and a clear understanding of which costs remain yours.

Start with the job and the skills your business needs. Then match the apprenticeship, provider and funding arrangement to a programme you can support through completion.