CITB plans to make it easier for subbies to pay the levy

CITB is reviewing the way its levy system works to make it quicker and easier to calculate what you should pay and complete the levy return.

CITB has put forward a simplified system based on the HMRC Construction Industry Scheme (CIS) payments to sub-contractors who are paid net of tax.

It says the proposal to simplify the levy system comes in response to feedback from payers who complain that calculating the levy can be complicated. It says the 2012 Levy Order narrowed the definition of a labour-only agreement, but it remains open to interpretation.

Feedback from employers suggests:

  • The levy basis needs to be simpler
  • The levy return needs to be easier and quicker to complete with no additional record keeping
  • Instead of raising a levy on labour-only sub-contract payments, CITB should consider a system based on PAYE and closer alignment with the HMRC Construction Industry Scheme (CIS) and, specifically, the monthly CIS300 returns

As a result of this feedback, the Levy Working Party, a small group of industry representatives, has spent 18months working on ways to simplify the system.

The main points of the proposed changes are:

Retaining PAYE Levy at 0.5%

  • No longer raising levy on payments to labour-only sub-contractors
  • Introducing a levy on payments made to Net CIS sub-contractors
  • Only payments made through the PAYE or CIS systems are liable for levy.

The National Specialist Contractors Council (NSCC) has been involved throughout the development process and the NSCC Training Committee has reviewed the impact of the proposals with CITB.

Research shows that the majority of NSCC Specialist Contractors will pay a similar levy under the proposed changes to their current level of payment. If accepted, the new system should be far simpler with a number of benefits for employers including:

  • No additional record keeping as employers will simply use records kept for HMRC purposes to identify both PAYE and relevant Net CIS sub-contractor figures
  • Removal of the uncertainty of the current system in regards to labour-only sub-contractors
  • Less time-consuming and therefore less expensive to complete
  • Less scope for error when completing a levy return.

You can download a Levy Calculator spreadsheet to calculate what you should pay. It is provided by CITB so that you can assess the impact the changes would have on your levy payments.

NSCC Chief Executive Suzannah Nichol says: “It is important that the CITB Levy system is made as user friendly as possible, so that specialist contractors have more time to focus on running their business and delivering quality work on site.

“Even more important is ensuring that the grants scheme continues to provide the financial support for the training and skills that are relevant and very much needed for today’s industry.”

For more information on the proposal, visit the CITB website.