Why do I have to complete the CITB-ConstructionSkills Levy Return?
If you are an employer in the construction industry, you are required by law to complete an annual CITB-ConstructionSkills Levy Return. An employer is a person/firm/company whose business is wholly or mainly engaged in construction activities and who employs people either directly (PAYE) and/or on a labour-only basis. A CITB-ConstructionSkills Levy Return is required so we can work out how much levy each employer has to pay. CITB-ConstructionSkills' mission is to promote and facilitate the training of sufficient people in the skills needed for a world-class construction industry. The levy funds this operation and is designed to fairly spread the cost throughout the industry.
What happens if I do not complete the CITB-ConstructionSkills Levy Return?
If we do not receive a completed CITB-ConstructionSkills Levy Return before levy assessment takes place an estimated assessment will be raised. You will still have the opportunity to complete the form.
The contractor I am working for has made deductions from me - why?
Under the Industrial Training Act 1982 we levy employers in the construction industry. Employers must pay levy on payments to sub-contractors for labour-only as well as on direct employees. However, the Act does not give authorisation to make deductions from any amounts paid to labour-only sub-contractor or other worker.
Section 13 of the Employment Rights Act 1996 (what was Section 1 of the Wages Act 1986) says that an employer must not take amounts from his or her worker's wages unless:
The deduction is authorised under the workers contract, or
The worker has previously agreed in writing
There have been a number of cases before industrial tribunals about deductions for our levy. The tribunals have made it clear that the deductions are not legal unless the worker has agreed beforehand.
The condition shown above of the Employment Rights Act applies to deductions made from labour-only sub-contractors as well as employees on PAYE. You may want to get legal advice about your own circumstances.
How do I work out the levy on payments to labour-only sub-contractors?
Employers must pay levy on payments to sub-contractors for labour-only as well as on direct employees. The employer must include the following in the Levy Return.
The total of all payments made for labour only services in the last tax year. This includes payments to all firms and people, whether or not they are registered with us. The levy is a percentage of this amount.
The total of all payments the employer receives during the same period for labour-only services carried out for other employers in the construction industry.
Employers need to show the names and addresses of other employers and the amount received. We will reduce the levy by the percentage rate which applies to labour-only payments. However, we can only reduce the levy to zero. We will not give employers a credit or carry it forward to another year if the amount allowed on the receipts is more than the levy.
Employers should declare payments before any deductions (other than pensions) for example, insurance or tax. Employers should not include VAT on the payments.
The Industrial Training Act does not give authorisation to make deductions from any amounts paid to labour-only sub-contractor or other worker.
Section 13 of the Employment Rights Act 1996 (what was Section 1 of the Wages Act 1986) says that an employer must not take amounts from his or her worker's wages unless:
The deduction is authorised under the workers contract, or
Yes, limited companies are required to have at least one director and a company secretary. A director working in the day-to-day activities of a company is an employee with an implied contract of service, despite any shareholding of self-employed status for National Insurance purposes. This view has been confirmed by Employment Tribunal on appeal.
What period does the CITB-ConstructionSkills Levy Return cover?
The tax year, 6th April - 5th April
Can we use our business financial year-end figures?
No - tax year end figures are required
Is VAT included?
No
Will approximate figures suffice?
No - exact figures are required. We cannot accept estimates.
What is an Establishment?
This applies where a business has many offices/locations and chooses to include all information on one levy return. The businesses included on the main return are referred to as establishments.
What does the term Employer mean?
For the purposes of the levy return, an employer is a person/firm/company who employs people directly (PAYE) and/or on a labour-only basis.
What is meant by Labour-only?
The legal definition is: “Any agreement or arrangement, either written or oral, not being a contract or service or of apprenticeship or for provision of professional services, between an employer and any other person or persons, the purpose of which is wholly or mainly the provision of services of such persons or of any other person or persons to the employer in his trade or business.”
In simple terms an agreement is ‘Labour-Only’ where the purpose of the arrangement is mainly the provision of the service of the subcontractor’s labour. A subcontractor may supply some materials but if these do not represent the main materials required for the job, the agreement is labour-only. Any subcontractor regardless of type of trade or CIS Certificate held may potentially be paid on a labour-only basis.
What does supply and fix mean?
Supply and fix is a term used within the construction industry relating to contracts which are for the supply of materials and labour-only.
I do not have a trainee - do I have to complete the CITB-ConstructionSkills Levy Return?
Yes, if you are an employer in the construction industry you are required by law to complete a CITB-ConstructionSkills Levy Return annually.
Why do I need to declare if I am a member of an employer organisation?
We need to know which employers’ organisations you belong to so that we can measure support for future levy proposals.
How will I know when the payments are to be taken from my bank account?
You will receive an Advance Notice at least 10 days prior to the first payment being taken form your bank account. This document will show you the amount of CITB-ConstructionSkills Levy you owe and confirm the payment dates and amounts of the instalment arrangement.
Can I still pay by Direct Debit instalments even if I don’t complete a CITB-ConstructionSkills Levy Return?
No. CITB-ConstructionSkills can only allow Direct Debit instalments if we have received a completed CITB-ConstructionSkills Levy Return.
Will I have to complete a Direct Debit mandate every year?
No. As long as you don’t cancel the Mandate with your Bank or Building Society, the arrangement will remain in place.
Will I be charged any interest or administration charges?
No. There is no charge for this service.
Can I still claim Grant?
Yes, you will be entitled to claim and receive CITB-ConstructionSkills Grant as before, including Supplementary Grant providing your payments are kept up to date. Grants will be paid in full.
