The apprenticeship levy was brought in by the government to help them fund their plans to make improvements in apprenticeship numbers and their quality, putting funding in the hands of businesses and encouraging them to invest in the support and creation of apprenticeships.
There may come a time when your business decides it’s appropriate to transfer any unused apprenticeship levy funds to a separate enterprise in order to pay for their apprenticeship training and assessment instead.
There are all sorts of benefits associated with doing so, ranging from developing the supply chain and bringing added value through skill development to increasing training opportunities to building relationships between your businesses and your employees.
Large employers paying the apprenticeship levy are permitted to transfer up to 25 per cent of their levy funds annually to other businesses, which can also help to improve your corporate social responsibility by supporting smaller firms or charitable organisations where their own apprenticeships are concerned.
Businesses will need to have an apprenticeship service account set up in order to receive a transfer of these funds. They can only be used to pay for apprenticeship training up to the maximum funding band and they can only be used for a new apprentice start, which means that transfer funding cannot be received for an employee that has already begun their apprenticeship.
However, there is an exception to this rule – when an apprentice changes employer, they can continue with this apprenticeship with their new company, funded by the transfer of levy funds.
When you transfer your levy funds, you’re committed to paying for the apprenticeship in question for the duration of the course, until the apprenticeship has been completed. All apprenticeships are at least 12 months long and they can start at any point, so the agreement will be to transfer funds over numerous financial years.
Before you make a levy transfer, consider how much levy funds you are likely to have available over future financial years, since you cannot send and receive funds at the same time. If you do decide to transfer levy funds, you won’t be able to receive a transfer while supporting an apprentice over several years.
Payments for transfer levy funds are made on a monthly basis and these commitments will be prioritised over the payments for your own apprentices, leaving your account first every month.
There are two ways of making a transfer using your apprenticeship service account, either by pledging and transferring funds so that other businesses can apply for funding or by inviting a business you know to make a connection so you can then arrange a transfer.
For advice relating to CIPS level 4 apprenticeships, get in touch with the Encompass Training team today.