The simple answer to this can be found in these two questions:
- Are you in the construction industry?
- Do you have employees and/or subcontractors?
If the answer to both of these is yes, then you are required by law to be registered with CITB, completing the annual return, and usually paying the annual levy.
CITB registered
Registered employers must pay the CITB levy. CITB collects the levy payment from about 75,000 companies in the UK. Companies liable to pay the levy are those whose wages bill is more than £80,000 per annum. If you need to register, click here.
Completing the annual return
Unsure about whether this applies to you? All construction industry employers are required by law to complete the annual Levy Return. This is regardless of whether you are training your staff/workforce or not. The return can be completed online or by post and we are more than happy to take this responsibility on for you if you require assistance.
Paying the annual levy
Based on your Levy Return, the CITB will send you a Levy Assessment Notice, which will tell you exactly how much you need to pay and the deadline for payment. At J Williams & Co, we can complete the annual return on your behalf and make sure that you are paying the correct levy level for your turnover and wage bill.
Changes to the annual levy
The CITB has indicated that the way that the levy is calculated is going to change. It was first suggested that the changes would be in place by 2017. However, further clarification suggests that the new calculation will be based on the 2015/16 tax year figures, and will need to be reported on the 2016 return.
The current levy charge, up to and including 2015:
The total wage bill is your total PAYE (Pay As You Earn) for the year, added to any payments made to LOSC (labour-only subcontractors) during the year.
- For a total wage bill of £79,999 or less, no payments are due but there is still the legal requirement to complete a Levy Return.
- For a total wage bill of over £80,000, the levy due will be 0.5% on the PAYE yearly total, plus 1.5% of your yearly total for LOSC payments.
- If your total wage bill is in excess of £80,000, but less than £100,000 then the levy charge will be reduced by 50%
The Levy Return, 2016 onwards:
Your total wage bill is your total PAYE for the year, added to any payments made to net CIS subcontractors for the tax year.
- For a total wage bill of £79,999 or less, no payments are due but there is still the legal requirement to complete a Levy Return.
- For a total wage bill of over £80,000, the levy due will be 0.5% of your total PAYE for a year and 1.25% of your total payments to net CIS subcontractors that year.
- If your total wage bill is in excess of £80,000, but less than £400,000, then the levy charge will be reduced by 50%.
Completing your Levy Return, CITB
Advice available
Fortunately, you do not have to work through the figures by yourself. Please do get in touch with us here at Smooth Accounting today to ask any questions that you may have about these new changes and to discuss handing over the responsibility for filing the levy returns to us.
There is the possibility that passing the charge over to your contractors may mean that you will not be faced with paying the increased levy bill (which needs to be completed as soon as possible,) and our advice is to contact them for discussion as soon as possible. Under the new rules, the annual levy could end up being quite sizeable – it isn’t usually under the current scheme. Let us deal with this headache for you. Please contact us today for a quote.
Some resources that you might find useful:
- Register with the CITB
- Further information and guidance from the CITB
- Grants are available to businesses in the construction industry. See if your business might qualify.
To have Smooth Accounting Ltd. take this weight from your shoulders, get in touch today for a quote.
