Most employers won’t see a big difference to their levy payments in 2017. Our research shows that:
The reason some employers may pay more is that the 2016 Levy Return doesn't take account of labour-only payments received (LOPR). So if your levy was previously reduced by LOPR, you’re likely to see an increase in the levy you pay.
We’ve set the levy rate at a level that is both affordable for employers and ensures we have enough income to continue to pay grants to support training. We aim to keep the levy income at the current forecast levels.
This is how we developed the 2017 levy system using feedback from employers in the construction industry through the consensus process.
1. Your feedback
Prior to 2012, we started to gather employers’ views on the CITB levy. You told us:
- The basis for calculating the levy needed to be simpler
- The Levy Return needed to be easier to complete with less bookkeeping.
- Instead of raising a levy on payments to labour-only subcontractors (LOSC), we should consider a system based on Pay as You Earn (PAYE) and align this with the government’s Construction Industry Scheme (CIS) and the monthly CIS300 forms that employers send to HMRC.
2. Developing the new levy system
After we gathered your feedback, the Levy Working Party (a small group of industry representatives) developed ways to simplify the levy system over the next 18 months.
The working party followed objectives set by the industry when developing the new levy system. The objectives were:
- The new system should be simpler
- CITB should maintain current forecast levy income levels, not increase them
- most employers should end up paying about the same amount of levy as they pay under the current system
- The existing levy rate on payments to PAYE (0.5%) should be maintained
- The final proposal must be endorsed by the construction industry
- The final proposal must be legally sound.
3. Consultation with industry
We then consulted extensively with the industry to make sure the new system would comply with the objectives above. We gathered feedback through:
- events held with construction employers across Great Britain
- independent research conducted into employers’ views
- a survey we sent to all employers with the 2014 Levy Return to gather feedback on the proposed levy changes
- analysis of data from the 2014 levy returns and CIS data from 36,500 employers to assess the potential impact of the changes.
4. Approving the new levy system
In July 2014, the CITB board approved the Levy Working Party’s proposal for the revised levy system.
The proposal was then approved by construction federations and employers through a formal consensus process.
CITB submitted the approved proposal to the Government and it was included in the 2015 Levy Order, which came into force in March 2015.
The Levy Order gives CITB the authority to raise a levy and sets out how that levy will be calculated.
The levy rate will be reviewed again before the 2018 Levy Order.
How we communicated with you about the changes
Throughout the process, we worked closely with employers and federations to ensure they were kept up-to-date with developments and when the changes would be implemented.
Timeline of communications:
- July 2014: we wrote to all CITB-registered employers to inform them of the changes to the CITB levy and the potential impact on their business.
- December 2014: we sent another mailing to all CITB-registered employers.
- March to April 2015: in the Levy Assessment Notice we sent in spring, we explained how much levy you would have paid if the new levy system had been used.