Apprenticeship Levy Transfer: A Guide for SMEs 

Apprenticeship Levy Transfer: A Guide for SMEs 

You may have heard the term ‘levy transfer’ being thrown around in conversations around apprenticeship funding. But do you know how the apprenticeship levy could benefit your business? Learn how you can build your business and save money with our simple guide. 


What is the apprenticeship levy? 

The apprenticeship levy is a tax paid by businesses with a payroll of more than £3 million. These businesses pay 0.5% of their total payroll into a pot, which they can take from to fund apprenticeship training. They can also choose to transfer a portion of any apprenticeship levy that they don’t use to ‘non-levy-paying employers’ (i.e. those with a payroll below £3 million), allowing them to fund apprenticeship training within their own businesses. This is known as an apprenticeship levy transfer. 


How does an apprenticeship levy transfer work? 

Levy-paying employers can transfer up to 25% of their apprenticeship levy to a non-levy-paying business. For example, they may choose to transfer a quarter of their levy funds to a smaller company in their supply chain, or a start-up in a related sector.  

Usually, the government covers 95% of the cost of training an apprentice for non-levy-paying business, and the employer covers the remaining 5%. If you receive a levy transfer, you can use it to cover your 5%, meaning you don’t pay anything towards your apprentice’s training.  


How can I get an apprenticeship levy transfer? 

You can start by browsing some of the available levy transfer opportunities online: Find a business to fund apprenticeship training. If you find a suitable opportunity, you can apply via your Apprenticeship Service Account. Not all levy transfer opportunities are added to this site, so if you can’t find a suitable opportunity, contact our Apprenticeships Advisers, who may know of other opportunities available and can advise you on how to apply. 


What will I need before I apply? 

You will need: