CITB Scotland to cut employer levy to 0.35%

Friday 23 June 2017

The Construction Industry Board (CITB) in Scotland has announced plans to cut the levy collected from employers from 0.5 per cent to 0.35 per cent of the total payments made to PAYE workers in 2018-20. 

As part of the move, the levy rate for subcontractors taxed under the Construction Industry Scheme will remain at 1.25 per cent. 

To gather views on the move, CITB Scotland spoke to roughly 6,000 employers from across the country. Of these, 66 per cent rated it as good or excellent, while 19 per cent regarded it as average and 15 per cent decided it was poor or very poor. 

It was found that employers in Scotland responded more positively than those in England, where 42 per cent rated the proposal as good or excellent and 31 per cent described it as poor or very poor. 

After a formal consensus that takes places from July to September 2017, both employers and federations will vote on the outcome before it is ratified by the UK government. 

To take advantage of the opportunities in construction, contractors across Scotland should be using specialist accountants. These experts can check if independent professionals fall inside or outside of IR35 and make sure they are taxed properly.

Ian Hughes, CITB strategic partnerships director in Scotland, said: “We firmly believe that the 2018 levy proposal offers a bright future for construction. In it, we’ve pledged to fund standardised training to deliver a workforce with relevant, transferrable skills. 

“We’ll also provide more financial support where and when it’s needed, and we’ll reduce paperwork – making it easier for employers to benefit from the CITB grant scheme.”

Mr Hughes went on to say that it is critical for the group to consult with employers across Scotland to make sure they understand how the proposal will impact the industry. 

He added that, prior to the consensus vote, the group will share more information about how the CITB will use funds raised by the levy in order to help Scotland meet its construction skill requirements.

As part of the levy proposal, companies will be exempt if their wage bill is under £80,000, or pay 50 per cent of the rate if their wage bill is between £80,000 and £399,000. 

Small businesses can calculate their levy by visiting the CITB website, where a tool is available to work out their exact payments. 

By Victoria McDonnell

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