Transferring unspent Apprenticeship Levy funds

The Department for Education (DfE) recently announced that it would amend Apprenticeship Levy policy to allow levy payers, from July 2018, to make transfers of their unspent levy funds to as many other employers as they choose, up to 10 per cent of their unspent funds.

When originally set out, the 10 per cent of unspent Apprenticeship Levy funds were only to be transferrable to one other employer. Employers who were not geared up for providing apprenticeships were concerned that this would still risk leaving a significant portion of their levy funds unspent and therefore wasted (making the levy effectively into another employment tax).

The Government has now also responded to a written question in the House of Lords, providing clarification on how new proposals will work:

Baroness Garden of Frognal: “To ask Her Majesty’s Government whether the lifting of restrictions on the transfer of apprenticeship levy funds between employers means that an employer can transfer 10 per cent of their total levy funds to each employer in receipt.”

Lord Agnew of Oulton: “Levy payers will now be able to transfer funds to any number of other employers, within their maximum 10% transferable allowance. This change does not mean that an employer can transfer 10% of their total levy funds to each employer in receipt. The 10% annual transfer allowance represents the maximum total value of funds an employer is able to transfer within a year.”

For more information on the Apprenticeship Levy, click here.