What Is a Construction Levy?

Written by petra turnbull
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The construction levy is a British program requiring large and medium-size construction companies to pay an annual fee to a fund. The resources of the fund are distributed to construction training providers.

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Function

The project is managed by CITB-Construction Skills, an industry board financed by the levy, public and European Union funds. The Industrial Training Levy Order has been initiated by the British Government for the years 2009, 2010 and 2011 to improve quality and quantity of construction training.

Identification

Every April, all registered construction employers are required to complete a CITB-Construction Skills levy return. The form asks for details on workforce and wage bills and office staff for the financial year so a levy assessment can be made. Companies with wage bills below UK£128,000 (about US$205,000 as of November 2010) do not have to pay the fee. Rates are 0.5 per cent of the total wages of the employees and 1.5 per cent of payments to subcontractors (in 2010).

Significance

According the CITB-Construction Skills, smaller construction firms are more likely to train new entrants in the industry while the larger companies benefit by hiring these skilled workers later in their careers. Without the CITB-Construction Skills grants financed by the levy, small firms could not afford to train operatives and the industry as a whole would suffer.

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