CITB Levy and Grants: What Employers Need to Know

Quick Answer: The CITB Levy is a statutory charge on employers in the construction industry, collected by the Construction Industry Training Board to fund skills and training across the sector. It is calculated as a percentage of your wage bill — split between directly-employed PAYE staff and labour-only subcontractors (Net CIS) — with a small-business exemption below a set wage-bill threshold and a reduction band above it. Levy-registered employers can then claim CITB grants for apprenticeships, qualifications and approved training. The exact rates, thresholds and grant amounts are set by Levy Order and change periodically, so always confirm the current figures with CITB.

Summary

If you employ people in construction, the CITB Levy is something you may have to register for and pay — and, just as importantly, something you can claim back against through grants if you invest in training. CITB (the Construction Industry Training Board) is a statutory body set up under the Industrial Training Act, and the levy is its main funding mechanism. The money raised is recycled into grants and funding designed to keep skilled people coming into the trades.

For most small trade businesses the headline question is whether you cross the registration and payment thresholds. There is a small-business exemption: employers whose total annual wage bill (PAYE plus Net CIS subcontractors) falls below a set threshold pay no levy, and there is a reduction band above that where the levy is charged at a reduced amount before the full rate applies. The rates differ for your PAYE wage bill and your labour-only Net CIS subcontractor payments. Because the figures are reset by Levy Order (subject to industry consensus and Parliamentary approval), this article explains the mechanism rather than quoting numbers that go out of date.

A common misconception is that the CITB Levy is the same as the Apprenticeship Levy — it is not. The Apprenticeship Levy is a separate UK-wide payroll tax on large employers administered by HMRC; the CITB Levy is construction-specific and administered by CITB. Some larger construction employers pay both, with arrangements to avoid double-counting on apprenticeship funding. Another frequent error is assuming you can only claim grants if you pay the levy — in practice you generally need to be registered with CITB, but smaller employers below the levy threshold can still register and access certain grants and funding.

Key Facts

• What it is — a statutory training levy on construction employers, collected by CITB to fund sector skills and training.
• Legal basis — the Industrial Training Act 1982 and the annual/periodic CITB Levy Orders, approved by Parliament.
• Who pays — employers "wholly or mainly" engaged in construction activities as defined in CITB's scope; you must register with CITB.
• How it's calculated — a percentage of your total wage bill, with separate rates for PAYE employees and for Net CIS (labour-only) subcontractor payments.
• PAYE element — levied on the gross emoluments of directly-employed staff at the PAYE levy rate.
• Net CIS element — levied on payments to labour-only subcontractors taxed under the Construction Industry Scheme at the Net CIS levy rate.
• Small-business exemption — employers below a set total wage-bill threshold pay no levy.
• Reduction band — between the exemption threshold and a higher figure, the levy is reduced (often by 50%) before the full charge applies.
• Levy Return — registered employers must complete an annual Levy Return declaring their wage bill, even if no levy is due.
• Grants offset cost — CITB pays grants for approved apprenticeships, qualifications (e.g. NVQs/SVQs) and short courses, which can exceed the levy paid for training-active firms.
• Apprenticeship grants — attendance and achievement grants are available for apprentices on approved frameworks/standards.
• Not the same as the Apprenticeship Levy — that is a separate HMRC payroll tax on employers with large pay bills, administered UK-wide.
• Coverage — CITB covers Great Britain (England, Scotland, Wales); Northern Ireland has its own CITB NI.
• CSCS link — grants often support the qualifications behind CSCS cards, the recognised proof-of-competence scheme on most sites.

Quick Reference Table

All rates, thresholds and bands change by Levy Order — confirm current figures with CITB.

Detailed Guidance

How the levy is calculated

CITB assesses your levy from the annual Levy Return you submit, which declares two figures: your total PAYE wage bill (gross pay of directly-employed staff) and your total Net CIS payments to labour-only subcontractors. Each is charged at its own levy percentage — the PAYE rate and the Net CIS rate differ — and the two are added to give your assessment. The split exists because labour-only subcontract labour and direct employment carry different training relationships, and the rates are set to reflect that.

The exemption and reduction thresholds

Small employers are protected by two thresholds. Below the exemption threshold (based on total wage bill) you pay no levy at all, though you may still need to file a Levy Return if registered. Between that threshold and a higher figure sits the reduction band, where the levy due is reduced (commonly by half) so the charge phases in gradually rather than hitting in full the moment you cross the line. Above the upper figure the full rate applies. The actual pound figures are set by the current Levy Order and are reviewed periodically.

Registering and the Levy Return

If you are an in-scope construction employer you should register with CITB. Each year you complete a Levy Return declaring your wage bill for the relevant period. CITB then issues a Levy Assessment Notice telling you what (if anything) is due, with options to pay in one go or by instalments. Filing the return on time is what keeps you eligible to claim grants — miss it and grant access can be suspended.

Claiming grants

The grants are the other half of the deal and are where training-active firms get value back. CITB pays grants for things like: taking on and supporting apprentices (attendance and achievement payments), achieving recognised qualifications such as NVQs/SVQs, and completing approved short courses (for example plant, health and safety, and specialist skills). For a firm that actively trains, grants claimed can equal or exceed the levy paid. Grants typically require the training to be from CITB's approved provision and the claim to be made within set time limits. Many of these qualifications underpin CSCS cards, the proof-of-competence cards required on most UK sites.

CITB Levy vs the Apprenticeship Levy

Keep the two levies separate in your head. The Apprenticeship Levy is an HMRC payroll tax charged on employers with a pay bill above the national threshold, funding apprenticeships UK-wide through the digital Apprenticeship Service. The CITB Levy is construction-specific and funds CITB's grants. A large construction employer may pay both; CITB has arrangements so that apprenticeship funding isn't double-counted. A typical small trade firm is far more likely to be affected by the CITB Levy thresholds than by the Apprenticeship Levy.

Frequently Asked Questions

Do I have to pay the CITB Levy?

Only if you are a construction employer in CITB's scope and your wage bill is above the exemption threshold. Below the threshold you pay nothing, though you may still need to register and file a Levy Return. Confirm the current threshold with CITB.

How is the levy worked out?

It's a percentage of your wage bill, with one rate on your PAYE staff costs and a different rate on your Net CIS (labour-only subcontractor) payments, added together. There's an exemption below a set wage bill and a reduced charge in a band above it.

Is the CITB Levy the same as the Apprenticeship Levy?

No. The Apprenticeship Levy is an HMRC payroll tax on large employers across all sectors. The CITB Levy is construction-specific and administered by CITB. Some large firms pay both.

Can I get the money back through grants?

Registered employers can claim CITB grants for apprenticeships, qualifications and approved training. For firms that train regularly, grants can offset much or all of the levy. You generally need to be registered and have filed your Levy Return to claim.

Can small firms below the threshold still claim grants?

Generally you need to be registered with CITB to access grants. Smaller employers below the levy-payment threshold can still register and may access certain grants and funding — check current eligibility with CITB.

Regulations & Standards

• Industrial Training Act 1982 — the primary legislation establishing Industrial Training Boards including CITB and the levy mechanism.

• CITB Levy Orders — periodic statutory instruments setting the levy rates, thresholds and reduction bands; subject to industry consensus and Parliamentary approval.

• Construction Industry Scheme (CIS) — HMRC scheme governing subcontractor payments; the Net CIS figure feeds the levy calculation. See [vat for trades](/knowledge/general/vat-for-trades).

• Apprenticeship Levy (Finance Act 2016) — separate HMRC payroll levy on large employers; relevant where it interacts with CITB funding.

• CSCS scheme rules — proof-of-competence card scheme underpinned by the qualifications CITB grants support.

• CITB: Levy and grant — official guidance on rates, thresholds and grants

• GOV.UK: Industrial Training Act 1982 — primary legislation

• CITB: Register and Levy Return — registration and annual return process

• GOV.UK: Apprenticeship Levy — the separate HMRC apprenticeship levy

• CSCS: Card schemes — competence cards and the qualifications behind them

• vat for trades — VAT, CIS and subcontractor deductions

• insurance — employer's liability and other cover when you employ staff

• quoting tips — pricing training and overheads into your rates

• building control — wider compliance obligations for trade businesses