CITB Board approves changes to employers’ levy calculation

A new simplified Levy calculation process has been approved today by the CITB Board. Following an 18-month consultation with industry and  extensive research with employers, the new process has been designed  by the Levy Working Party (LWP) – a group of industry representatives tasked with looking at how to simplify the levy process.

The new scheme:

•    Maintains PAYE Levy at 0.5%
•    Brings to an end the raising of  Levy on payments to Labour-only sub-contractors
•    Introduces a Levy on payments made to Net (taxed) CIS sub-contractors,  using figures already provided by employers to HMRC
•    Increases the size of the small business levy reduction from £100,000 to £300,000
•    Removes the Labour-Only Payments Received offset mechanism, which affects less than 10% of all employers

The changes will not come into effect until 2017.

All registered employers will receive a letter from next week, informing them of the changes to the Levy and the possible impact on their business. If you want to see how your business will be affected, you can try the online calculator to see how your levy contribution will change.

Douglas Matthew, Head of Levy and Grant for CITB said: “The changes have come in response to feedback from employers. They told us that the current process is complicated, time-consuming and can lead to extra administration costs.

“More than 22,000 employers currently pay the Levy so it is important that we have the right system in place. Using figures provided by employers on their 2014 Levy Returns, we believe that under the new arrangements 84% of employers are likely to pay the same or less Levy . Where companies face an increase in their payments – will work closely with them, , to help them through the transition.