Apprenticeships are an excellent way to gain practical skills and knowledge while earning a wage. However, you may wonder, “What happens to unused apprenticeship levy?
In this article, we’ll explore the ins and outs of unused Apprenticeship Levy and its implications.
Accumulating Levy Funds
When eligible employers pay their levy, the funds are transferred to their Digital Apprenticeship Service (DAS) account. This online portal allows employers to manage their levy funds and allocate them to apprenticeship training. The funds in the DAS account don’t expire, so that they can be saved up over time for future use.
The Time Factor
Levy funds are available for 24 months once they enter an employer’s DAS account. This means that if funds are not used within two years, they will expire. Employers must keep track of their funds and plan their apprenticeship programs accordingly to make the most of their investment.
What Happens to Unused Levy Funds?
If an employer doesn’t use all of their levy funds within the 24-month timeframe, these funds don’t just disappear. They are reinvested into the broader apprenticeship system to support smaller employers who may not be subject to the levy. This ensures that the money collected is still used to foster skills development and support workforce growth.
Transferring Levy Funds
Employers can transfer up to 25% of their unused levy funds to other employers, including those in their supply chain. This enables employers to support the apprenticeship training of smaller businesses and nurture a culture of skills development across industries.
Putting Levy Funds to Good Use
To avoid letting unused levy funds go to waste, employers should consider the following steps:
- Planning Ahead: A strategic approach to apprenticeship planning helps utilise funds effectively. Identifying skill gaps and designing training programs will maximise the investment.
- Collaboration: Engaging with training providers and apprenticeship organisations ensures a seamless training experience, making the most of the allocated funds.
- Transfers: If your organisation can’t use all the funds, transferring them to other employers can positively impact the wider workforce.
Summary
The Apprenticeship Levy is a valuable tool for skills development in England, aimed at boosting the nation’s workforce and economy. While unused levy funds have a time limit, they are always well-spent. They are redirected to support smaller employers and promote apprenticeship training across various sectors. By planning strategically and collaborating effectively, employers can make the most of their Apprenticeship Levy contributions and contribute to the growth of a skilled and competitive workforce.