Raft of changes for firms including labour-only and Construction Industry Scheme sub-contractors
Skills body the CITB has introduced a raft of changes to simplify the training levy system, following an 18-month consultation with employers.
The CITB said that said under the new arrangements 84% of employers were likely to pay the same or less levy.
The new scheme:
- Maintains PAYE Levy at 0.5%
- Brings to an end the raising of levy on payments to labour-only sub-contractors
- Introduces a levy on payments made to net (taxed) Construction Industry Scheme (CIS) sub-contractors, using figures already provided by employers to HMRC
- Increases the size of the small business levy reduction from £100,000 to £300,000
- Removes the Labour-Only Payments Received offset mechanism, which affects less than 10% of all employers
Douglas Matthew, head of levy and grant for CITB said the changes had come in response to feedback from employers.
“They told us that the current process is complicated, time-consuming and can lead to extra administration costs,” he said.
He added: “More than 22,000 employers currently pay the levy so it is important that we have the right system in place.
“Where companies face an increase in their payments, we will work closely with them to help them through the transition.
“To give all employers time to prepare for the new arrangements, the changes will not be implemented until 2017.”
All registered employers will receive a letter from next week, informing them of the changes to the levy and the possible impact on their business.