18.07.14 Outcome of CITB Levy Simplification Announced

The operation of the CITB Levy system has been subject to review during the last 18 months.  The outcome of that review has now been published and results in proposed simplification in operation of the CITB Levy which is planned to come into effect in 2017.

The current levy return process is considered to be too complicated and time consuming for employers.  The new process will encompass the following simplifications;

• Levy will no longer be raised on payments to labour-only subcontractors
• Instead it will be raised on the value of labour payments made to net CIS subcontractors, as reported on the company CIS 300.
• The Levy will be calculated as 1.25% of the net CIS payment
• The offset for incoming labour only payments will be removed
• The 50% Small Business Levy Reduction threshold will increase from £100,000 to £400,000 (this will be valid for businesses whose total payments are more than £80,000 but less than £400,000 – their Levy bill will be reduced by 50%)

Government believe that for 84% of employers their Levy will remain unchanged or reduce.  They will be writing to the 23,000 affected employers in due course.

The changes are subject to parliamentary approval in spring 2015, with implementation planned for 2017.

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