A major change is being proposed to the CITB Levy system to make it quicker and easier for employers to complete their Levy Return. However, levy payments for Labour Only Sub-Contractors (LOSC), which will be via the CIS systems, will still be more than double the PAYE rate.
The news comes after consulting employers who said that the levy can be complicated and time-consuming to calculate. 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.
The main points of the proposal include: retaining PAYE Levy at 0.5%; no longer raising levy on payments to Labour Only Sub-Contractors (LOSC); introducing a levy on payments made to Net CIS sub-contractors; and only payments made through the PAYE or CIS systems would be liable for Levy.
NSCC has been involved throughout the development process and the NSCC Training Committee reviewed the impact of the proposals with CITB. The research undertaken shows that the majority of specialist contractors will pay a similar levy to that under the current system and, if accepted, the new system should be far simpler with a number of benefits for employers.
NSCC say benefits include no additional record keeping – 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 LOSC; less time consuming and therefore less expensive to complete; and less scope for error when completing a Levy Return.
Employers can use the online Levy Calculator provided by CITB to assess the impact the proposed changes would have on their Levy payments.
NSCC Chief Executive Suzannah Nichol MBE said: “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.