CITB is consulting on a proposal to simplify the way that CITB Levy is generated. The focus of the current proposal is to tackle the main issues raised by levy payers, including the identification of which payments are labour-only and the complex nature of the levy return.
The proposal is a simplified system based on payments through the HMRC Construction Industry Scheme (CIS), specifically on payments to sub-contractors who are paid net of tax (referred to as Net CIS Sub-Contractors). The main points of the proposal include retaining the PAYE Levy at 0.5%, no longer raising levy on payments to labour-only sub-contractors and introducing a levy on payments made to Net CIS Sub-Contractors.
Under the proposed new scheme only payments made through the PAYE or CIS systems would be liable for Levy and CITB would seek to maintain current Levy income levels, not increase them. The majority of employers should end up paying about the same amount of Levy as they currently do and the final proposal would have to be endorsed by the industry to take effect.
The proposed changes should have a range of benefits such as easy identification of figures required when completing the Levy Return straight from the monthly CIS300 return. The process should also be less time consuming than it currently is and therefore potentially cheaper with less scope for employers to fill in the Levy Return incorrectly.
As part of the consultation process, CITB will be holding various workshops around England, Scotland and Wales with invites being sent direct to companies. Following the consultation, and if the final proposal is approved by the industry, a notice period will be given to employers and amendments will be made to the levy legislation. Any changes are unlikely to be introduced until 2016 at the earliest.