Giving and Receiving: Levy Gifting Explained

The Apprenticeship Levy is a 0.5% tax on UK employers with an annual pay bill of over £3 million yearly.

This funding can then be accessed by the organisation to support productivity and growth by providing quality vocational training and employment using apprenticeships. Employers can only spend their levy funds on apprenticeship training in England.

Following a Freedom of Information request led by the Department for Education in 2019, it was discovered that despite the Apprenticeship Levy raising £2.8bn, only £864m of the finding was spent.

In response to this, the Government made it possible for levy-paying employers to ‘gift’ part of their apprenticeship Levy to help fund apprenticeships to those organisations and employers who had already spent their levy or normally do not have access to it. 

Not only does this open up training and development opportunities for all-sized businesses, but it is worth noting that if Levy-paying employers choose not to use the levy or only use a part of their funds towards their apprenticeship training, it does expire (after 24 months)!

From 1st April 2024, the Government has made it possible for levy-paying employers to ‘gift’ up to 50% of their apprenticeship Levy to SMEs to fund new apprenticeships in other organisations.

Levy gifting can make a huge difference to everyone involved. By gifting unused levy, large organisations can effectively sponsor an apprenticeship within an industry or business that aligns with their values and social responsibilities, while at the same time supporting employment and skills development in their sector.

For example, a large hotel could gift some of its unspent levy to a smaller business, say a small boutique hotel, one that aligns with the same values and can be seen to benefit its community and the sector as a whole.

How does gifting work?

By working with 'best place to work' employers, we know that we are collaborating with people and organisations that share the same passion as us for creating opportunities, growth and success for people wanting to build a career in hospitality.

We always welcome organisations who wish to gift their unspent levy to smaller employers, knowing together, we can make a real difference.

One way organisations can gift their levy is to pledge funds through the Government’s online service.

1. Choose an amount you wish to gift in a given financial year.

2. Choose the criteria you wish an organisation to have to receive your gift. These include:

   • Sector

   • Location

   • Type of apprenticeship

   • Apprenticeship level

3. SME’s then apply via the online service to receive a Levy gift.

4. If they fit the criteria given by the company pledging their Levy, they can receive the funds towards Apprenticeship standard training programmes.

Another way you can gift is with our support!

1. Simply contact Umbrella Training at info@umbrellatraining.co.uk

2. Choose an amount you wish to gift in a given financial year.

3. Choose the criteria you wish an organisation to have to receive your gift.

4. We can support and guide you through the process, and together we can celebrate the impact that your gifted funds will make.

We have helped organisations like Chateau Denmark, The Barnyard, Royal Air Force Club, Royal Over-Seas League, Nobu Hotel London Shoreditch give or receive levy funding and we would love to help you too!

Benefits

There are many ways your gift can make a difference to an SME and to your organisation. Not only do you make a big difference to a business directly, but you also help support your industry by investing in new talent and skills entering the workforce.

Other benefits include:

1. Your organisation can meet your social responsibility agenda

2. Help build brand awareness within the industry

3. Help people in local communities by investing in new jobs

4. Helps to solve skills shortages by allowing for development and growth using apprenticeships

5. Investing in the hospitality sector as a whole

6. Have an impact on the learning and development strategies

How can I receive a levy gift?

There are a few steps you need to take to apply for funds through a levy transfer. It is good to note that Employers may decide to transfer their levy to specific sectors or businesses. They may also choose to fund particular levels of apprenticeships.

For example: They may wish to only fund Level 5 apprenticeships in the Hospitality sector. If your organisation does not fit that criteria, it is best not to apply for funding from them.

1. You need an apprenticeship service account to apply, if you do not have an apprenticeship service account you can read the guidance on setting one up.

2. Before logging into your account and starting the process you need to know:

3. Which apprenticeship standard your apprentices will be undertaking. (Level and name)

4. How many apprentices do you need funding for (remember you can apply for multiple apprentices within one application if they are doing the same apprenticeship. If your apprentices are doing different apprenticeships you need applications for each apprenticeship).

5. The location of where your apprentice will be working from

6. The apprentice's expected start date

7. You can view the available funding opportunities on the pledge page.

8. Your application is then shared directly with the employer who is gifting. They will review your application and if they wish to proceed with the gift they will confirm and accept your application. Remember if they say no, you can always try again with another organisation.

9. Once they have accepted your application, you need to confirm the transfer of funds via your account. If you no longer need it you must withdraw your application.

10. The transfer payments will then be made monthly into your apprenticeship account for you to spend on your apprenticeship training. Remember these funds can only be used for apprenticeships. 

It is reassuring that you can see the status of your application at every stage in your apprenticeship service account.

Remember Umbrella Training can help support you every step of the way! We can even help find your funding if you cannot find any pledges on the government website.

If you have any questions regarding levy gifting or receiving levy gifts, please do reach out to us and we can help you understand the process or advise the steps to take.

We believe sharing the levy works out for everyone involved and helps build a mindful and caring hospitality community and a strong and impactful workforce.