Can the Apprenticeship Levy Be Used for Existing Staff?

Apprenticeships are an excellent way to gain practical skills and knowledge while earning a wage. However, you may wonder, “Can the apprenticeship levy be used for existing staff?”

The Apprenticeship Levy, introduced in April 2017, is a UK government initiative to encourage employers to invest in apprenticeship programs. While it primarily focuses on creating new apprenticeship opportunities, many employers are curious whether the levy can be utilised for training and developing their existing staff. 

This article will explore the possibilities and requirements for using the Apprenticeship Levy for upskilling and reskilling existing employees.

Can the Levy be Used for Existing Staff? 

Yes, the Apprenticeship Levy can be used for training and development programs for existing employees. This is known as the “Transfer Allowance” or “Transfer of Apprenticeship Levy Funds.” It enables employers to transfer up to 25% of their annual levy funds to other employers, including those within their supply chains, apprenticeship training agencies, or apprenticeship training providers.

Conditions for Transferring Levy Funds

To transfer the Apprenticeship Levy funds to existing staff, certain conditions must be met:

1. Relationship between Employers: The transferring and receiving employers must be registered on the government’s Apprenticeship Service and have a transfer agreement.
2. Registering Employees: The receiving employer must identify the existing employee as an apprentice candidate and enrol them in an eligible apprenticeship framework or standard.
3. Eligible Apprenticeship Standards: The apprenticeship training program must be approved for funding under the Apprenticeship Levy.
4. Funding Restrictions: The transferred funds can only cover the training and assessment costs associated with the approved apprenticeship standard. It cannot be used for wages, travel, or other employee expenses.

Benefits of Using the Apprenticeship Levy for Existing Staff

1. Skills Development: Utilising the levy for existing staff allows employers to provide focused training, upskilling, or reskilling opportunities, enhancing their workforce’s competencies and productivity.
2. Retention and Engagement: Offering apprenticeship programs to current employees can boost morale, job satisfaction, and loyalty, as it demonstrates the company’s investment in their professional growth.
3. Cost Savings: Using the levy to fund internal training programs can be more cost-effective than hiring external consultants or sending employees for external courses.
4. Fill Skills Gaps: By utilising the levy for existing staff, employers can address specific skills gaps within their organisation, ensuring a skilled workforce that meets evolving business needs.

Summary 

The Apprenticeship Levy presents a valuable opportunity for employers to invest in the training and development of their existing staff. By adhering to the transfer requirements and conditions, employers can use the levy funds to upskill or reskill their employees, fostering a more competent and engaged workforce. Leveraging the levy in this manner can contribute to the long-term growth and success of businesses across the United Kingdom.