Are you in construction?

Did you know that, if you have employees or contractors from whom you make a CIS deduction, you should be paying a small levy to the Construction Industry Training Board (CITB)?

If your answer is ‘No’, you’re far from being the only one! However, we’re finding that our construction clients are receiving notifications that they are liable to pay this levy. In some cases they’ve also received an assessment of what is due that is wildly inaccurate! 

Who should pay the levy? To quote the CITB website, ‘the levy applies to all employers engaged wholly or mainly in construction industry activities.’

That includes sole traders who have occasional contractors who are paid with CIS deductions. In other words if your work includes more than 50% of your time working on anything that comes under the construction trades, whether domestic or commercial and you have anyone who works with you, either employed or contracted, you’re liable. 

What does this mean to construction employers? It means that you are required to pay 0.35% on PAYE to CITB and 1.25% for Net CIS deductions under the 2022 Levy Order.

Why are you paying this? It’s not a tax, although it is a government scheme. It’s a way to fund training and development for people in the construction industry. The CITB use the funds used to develop occupational standards and related qualifications as well as providing grants and funding for skill development.

What happens if you don’t pay? Currently, the CITB don’t appear to have a penalty regime but there is the power to impose a fine if you do not comply. They will also charge statutory interest. It’s not an optional levy, it’s a requirement.

It’s not complicated, the paperwork is pretty simple, but any assessments that the CITB may send you, should be checked, as you want to make your payment based on the correct numbers. Get your accountant to help you make sure the initial payment, including any back-dated, is accurate, then whoever does your bookkeeping should be able to submit future levies.

Want to know more?

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