CITB - Frequently Asked Questions - Source CITB - September 2015
Source CITB - September 2015
Q1. I am informed that all Mechanical & Electrical Contractors are not in scope for the CITB registration and Levy, can you please confirm this.
Yes – I can confirm that mechanical and electrical contractors are not in-scope.
The activities of the construction industry for the purposes of the CITB Levy & Grant Scheme are defined at Schedule 1 Paragraph 1 of The Industrial Training (Construction Board) Order 1964 (Amendment) Order 1992 (the Scope Order). This legislation also specifically excludes activities from being construction for CITB purposes at paragraph 2. I can confirm that both mechanical and electrical activities are excluded in accordance with paragraphs 2 (c)(iii) and 2 (c)(xviii), which state (respectively):
“the assembly, construction, erection, installation, fitting, testing, inspection, thermal insulation, repair or replacement on site of any chemical, electrical or mechanical apparatus, machinery or plant of a chemical works, gas making or gas treatment works, nuclear or thermal power station, hydro-electric station, oil refinery or oil terminal or other apparatus, machinery or plant concerned with exploration for or exploitation of oil or gas, metal smelter, steel mill, paper mill or brewery;” &
“the provision or continued provision for any building or other construction or work or operations carried out on any site referred to in paragraph 1(a)(i) to (vii) of this Schedule of water, gas, electricity, lighting, heating, ventilation or air-conditioning, where undertaken in, upon, above or under the building or the close curtilage or precincts thereof, or such construction or work or operations on any such site;”
Q2. Can you confirm that all Labour agencies (who are not allowed to operate CIS) who engage over 50% of their labour on a PAYE basis are in scope and should be registered with the CITB for the Levy.
Labour agencies (like any other entity) will be in-scope if over 50% of their employees time is spent engaged in construction industry activities as defined by the Scope Order.
The legislative criteria for registration with CITB is that an establishment must be:
a) An employer (i.e. it must have PAYE or LOSC (or both) &
b) Its total employees time must spend over 50% of their time engaged in what the Scope Order defines at Schedule 1 Paragraph 1 as construction activities.
Whether or not a labour agency is required to be registered will depend on whether its employees (including any persons engaged under a contract for services on a labour-only basis) are mainly engaged in construction activities. Whether or not it is allowed to operate CIS is not a requirement for registration with CITB. The CIS Scheme defines the activities of the construction industry based on the Finance Act 2004 definition, which is contained at Section 74 of that Act. The CITB is governed (from an activity perspective) in accordance with the Scope Order.
Q3. Can you confirm the same applies for Umbrella companies who in general engage Agency Labour operatives on a CIS and PAYE basis are in scope and should be registered with the CITB and for the Levy.
As is the case with labour agencies (and any other entity) the same registration criteria is applied to umbrella companies. We would therefore seek to identify whether an umbrella company has PAYE and/or LOSC engaged in construction industry activities. If it did, and over 50% of the total employees time was spent engaged in construction as defined by the Scope Order, that entity would be deemed as a ‘construction establishment’ and liable to levy assessment.
• The grant year runs from 1st August to 31st July (college year) whereas the Levy year is 6th April to 5th April (tax year).
• If a business is newly registered the first Levy Return would be 2016 (Levy payable in 2017) and they can claim grants from 1st August 2016 however they can claim for apprenticeship or Craft non-apprenticeship grants from 1st August 2014.
• The new Levy calculations will be effective from the 2016 Levy Return – payable in 2017.