2017 Levy Return Guidance Notes

Transcription

1 citb.co.uk 2017 Levy Return Guidance Notes A guide to the Levy and completing your Levy Return

2 Contents Why does the industry have a Levy system? What does the Levy support? Levy changes Levy rates Who should complete a Levy Return? Levy exemptions and reductions Why do I have to complete a 2017 Levy Return? What about dormant companies? Can I complete my Levy Return online? What happens if I don t complete a Levy Return? Can I pay by Direct Debit instalments? Can anyone other than CITB collect the Levy? Can I claim grant? Supplementary Payment How to complete your 2017 Levy Return Details of your business What is my business UTR number? What is my main activity? Main activities Membership of employer organisations Full names of sole traders or partners Establishments Payments to employees, including paid directors What must be included in box A? What must be included in box B? Construction Industry Scheme (CIS) payments and status Box C: Total tax deducted Box D: Total CIS payments Box E: CIS status Box F: Payments to taxable sub-contractors less materials Declaration Checklist Example of a completed Levy Return It s important to be accurate Useful tips to complete your 2017 Levy Return Page Levy Return section Section Section 1a Section 1b Section 2 Section 3 Section 4 Section 5 2

3 Why does the industry have a Levy system? The Levy collected is used to ensure that industry invests in attracting and training new entrants, as well as retaining and developing its existing workforce. Equipping people with the right skills ensures construction projects are completed safely, on time, to cost and to the highest standards. The Levy and Grant system was set up in the 1960 s to address the need for skills development and continuous training in the construction industry. It is a system that continues to be strongly supported by industry. Every three years legislation enabling CITB to raise the annual Levy has to be renewed following extensive industry consultation and approval. The next renewal of that legislation is due in early 2018 and the 2017 Levy Return will be the first assessed under that new legislation. The levy rates to be applied to this Levy Return will be confirmed towards the end of 2017 or very early For further information and updates please visit our website citb.co.uk/levy-grant/how-much-levyto-pay What does the Levy support? It ensures that employers who train and qualify their people can be supported by grants such as Apprenticeship grants It shares the cost of training those who don t regularly train still contribute to the industry skills base and driving up standards It ensures that specialist trades get the training provision they need It supports employers in taking on new entrants across Great Britain, see goconstruct.org It supports high profile campaigns to improve the image of the industry It ensures that investment in skills and training is maintained during peaks and troughs of industry output to help minimise skills gaps and shortages It supports industry research It helps set standards It supports work in influencing Government Legal statement The law requires employers engaged wholly or mainly in construction industry activities to complete a Levy Return. If we do not receive your Levy Return, we will estimate how much you must pay. If you fail to return it by the due date, we reserve the right to take legal action in accordance with the Industrial Training Act 1982, s6(5) Levy Return Guidance Notes 3

4 Levy rates Levy rates applied to the 2016 Levy Return (tax year 6th April th April 2016), which were assessed in the first quarter of 2017 were 0.5% of payments to directly employed personnel (PAYE) and 1.25% of payments made to net paid (CIS taxable) sub-contractors. The Levy rates to be applied to the 2017 Levy Return which will be assessed in quarter one of 2018 will be confirmed in late 2017 or early Levy Return PAYE Net paid (CIS taxable) Assessed sub-contractors 2017 Rates to be confirmed Rates to be confirmed 2018 (Q1) Who should complete a Levy Return? Each year, every construction employer on our register is obliged to complete an annual Levy Return providing information about their workforce and wage bill for the fiscal year so a Levy Assessment can be calculated. Levy exemptions and reductions For the 2016 Levy Return, if your total wage bill including payments made to net paid (CIS taxable) sub-contractors exceeded the Small Business Levy Exemption threshold of 80,000, you would have been required to pay a Levy in The tables below provide details of the Small Business Levy Exemption and Small Business Levy Reduction for the 2016 Levy Return. The exemptions and reductions to be applied to the 2017 Levy Return will be confirmed in late 2017 or early Small Business Levy Exemption 2016 Levy Return threshold to be confirmed Less than 80,000 If your wage bill (including payments made to net paid (CIS taxable) sub-contractors) was less than 80,000 you would not have paid a Levy Between 80, ,999 Small Business Levy Reduction 2016 Levy Return threshold to be confirmed If your wage bill (including payments made to net paid (CIS taxable) sub-contractors) was 80,000 or more but less than 400,000 you would have received an automatic reduction of 50%. 4 4

5 Why do I have to complete a 2017 Levy Return? Each year, every construction employer on our register is legally obliged to complete an annual Levy Return providing information about their workforce and wage bill for the fiscal year so a Levy Assessment can be calculated. Further information is available on our website citb.co.uk/levy What about dormant companies? Dormant companies must still complete an annual Levy Return and we may require evidence of dormancy. Can I complete my Levy Return online? Yes. To use this service you will need your CITB registration number and some other basic details, and we will send you a login to access the system. Once you are registered for this service, you can view your Levy balance, your previous years Levy Returns and complete and submit your Levy Return online. Visit citb.co.uk/levy/levy-return to apply for a password. What happens if I don t complete a Levy Return? We will send you an estimated Levy Assessment, which may be more than you would normally pay. You must pay this estimate in full or we can take legal action against you, and you will lose the right to pay by Direct Debit instalments. It will also affect your entitlement to receive grant payments from us. Can I pay by Direct Debit instalments? Yes. If you complete your Levy Return on time you can take advantage of the free Direct Debit instalment facility, allowing you to pay your assessed Levy in up to 10 interest-free monthly instalments. A Direct Debit mandate is available on our website citb.co.uk/levy/paying/ Can anyone other than CITB collect the Levy? Some employers within the industry make deductions from their sub-contractors as a way of raising funds to pay their own Levy this is sometimes called passing on the Levy. These deductions are not payments of Levy, but a way of reducing the amount due on a sub-contract payment. Under the Industrial Training Act 1982, CITB raises a Levy on employers in the construction industry. The Act does not give authorisation to employers to levy or make deductions from any amounts paid to any workers, including subcontractors. Despite this, some employers continue the practice of passing on. If your employer is making deductions without your consent or agreement you may wish to seek independent legal advice Levy Return Guidance Notes 5

6 Can I claim grant? All eligible employers who are registered with CITB can claim grants, even those who qualify for the Small Business Levy Exemption or Reduction. However, conditions apply and our Grants Scheme rules state that you have to return your completed Levy Return by the published deadlines or you will not receive payment for the grant claims you make. Please note: Failure to submit your completed 2017 Levy Return by 31/07/2017 will result in any 2017/2018 grant claims being withheld until we receive your completed Levy Return. Failure to submit your completed 2017 Levy Return by 31/12/2017 will mean your eligibility for all 2017/2018 grant claims will be lost. Supplementary payment Employers will qualify for an additional Supplementary Payment on grants in the 2017/2018 Grant Scheme, which will end 31/03/2018, if the following conditions are met by 31/07/2017: - You have correctly completed and submitted a 2017 Levy Return - You completed a 2016 Levy Return which resulted in the payment of Levy that you have paid in full or are paying in instalments. Please note that you can only claim grant for people who are declared on your Levy Return. How to complete your 2017 Levy Return Section 1: Details of your business To save you time, this section of the Levy Return may already have been completed from our records. Please check this information and amend any incorrect details. Please check the information in this section is correct. If it isn t, please amend it as it could affect your registration. It is essential that it is not left blank. What is my business UTR number? Your UTR is your business Unique Tax Reference from HMRC. It is a 10 digit number that appears on all correspondence from HMRC. Please ensure you provide your business UTR, not your personal UTR if you have one. What is my main activity? This is the activity which represents the majority of your employees time (including sub-contractors). From the list opposite choose which main activity best represents your business. This list is not exhaustive so if your main activity has changed it is important that you advise us by describing it in the box provided on the Levy Return. 6

7 Main activities Access Equipment Access flooring Alteration to a building or part of a building Architectural steelwork installation Artexing Asbestos removal Asphalt and tar spraying Bricklaying and pointing Building and civil engineering Building repair and maintenance Cavity wall insulation, draught proofing or loft insulation Chimney lining Civil engineering Concrete flooring Concrete repair Conservatories Construction labour agency/payroll provider Curtain walling/structural glazing Damp proofing Demolition Developers Diamond drilling and sawing Directional drilling Dry lining and partitioning Dry lining Erection of timber framed buildings Erection or dismantling of exhibition stands Façade preservation Felt roofing Fibrous plastering Fitted kitchen/bedroom/bathroom installation Flat glass-glazing/emergency boarding up Formwork Garage door installation General building Hard flooring Hard landscaping and paving Hard metal roofing (using copper, zinc, aluminium, titanium, stainless steel and bronze) House building Insulated concrete formwork Insulated enclosure specialists (i.e. cold storage contractors) Insulated rendering/cladding Interior fit-out Joiner and carpenter (mainly site work) Joinery manufacture Land drilling Leadworking Liquid waterproof systems Mastic asphalt Netting and rigging Open-cast coal mining Painting and decorating Partitioning Passive fire protection Paving Piling Plant hire/repair Plastering and artexing Plastering Playground installation Powered access Preparing/fixing stone for building, including stone masonry Rail plant hire and repair Railway contracting Reinforced concrete Resin flooring Road planing Road safety marking Road surface treatments Roof sheeting and cladding Roofing including slating and tiling Scaffolding Sealant application Shelving and racking Shopfitting Single ply roofing Site preparation or groundworks Sprayed concreting Steeplejack or lightning conductor engineering Suspended ceiling installation Suspended platform installation Swimming pool construction Term maintenance buildings Term maintenance roads Tool and equipment hire Tunnelling Underpinning Utilities Wall and floor tiling Window film application 2017 Levy Return Guidance Notes 7

8 Section 1a: Membership of employer organisations We consult regularly with employer organisations, including the Consensus Federations (see list to the right) that represent employers from across the industry on key Levy issues, including Levy rates and thresholds. Please indicate any employer organisations you belong to. This information enables us to calculate each organisation s level of employer representation. We do not pass any financial information you give us to employer organisations. PLEASE DO NOT LEAVE THIS BOX BLANK. If you don t belong to an employer organisation you should state NONE. The following federations and associations are members of Build UK ACAD Asbestos Control & Abatement Division ACIFC Association of Concrete Industrial Flooring Contractors ARCA Asbestos Removal Contractors Association ADCAS Association of Ductwork Contractors and Allied Services ASA Association of Sealant Applicators ASFP Association for Specialist Fire Protection ASUC Association of Specialist Underpinning Contractors ATLAS Association of Technical Lightning and Access Specialists BBSA British Blind and Shutter Association BDA British Drilling Association BGA British Geomembrane Association BWF British Woodworking Federation CFA Contract Flooring Association CONSTRUCT Concrete Structures Group DHF Door and Hardware Federation DSA Drilling and Sawing Association FeRFA Resin Flooring Association Build UK BWF British Woodworking Federation CECA Civil Engineering Contractors Association CPA Construction Plant-hire Association FMB Federation of Master Builders HAE Hire Association Europe HBF Home Builders Federation NAS National Association of Shopfitters NFB National Federation of Builders NFDC National Federation of Demolition Contractors SBF Scottish Building Federation SDF Scottish Decorators Federation SPOA Scottish Plant Owners Association Visit citb.co.uk/uk-federations if you would like more information about the federations we work with and their contact details. FIS Finishes and Interiors Sector FPS Federation of Piling Specialists GGF Glass and Glazing Federation INCA Insulated Render and Cladding Association IPAF International Powered Access Federation NASC National Access & Scaffolding Confederation NFDC National Federation of Demolition Contractors NFRC National Federation of Roofing Contractors PDA Painting and Decorating Association RIDBA Rural and Industrial Design and Building Association RSMA Road Safety Markings Association SAEMA Specialist Access Engineering and Maintenance Association SPRA Single Ply Roofing Association STA Structural Timber Association TICA Thermal Insulation Contractors Association TTA The Tile Association 8

9 Section 1b: Full names of sole traders or partners Complete this section if your business is not a limited company. Please include the full names of all sole traders or partners. Section 2: Establishments Construction establishment means any establishment engaged wholly or mainly in the construction industry. If you have only one construction establishment please enter ONE in the box. If you have more than one Section 3: Payments to employees, including paid directors In this section, you need to inform us of your total payments in whole pounds, before deductions, to all employees, including any directors on your payroll. This means everybody who has worked for you during the year ending 5 April 2017 and who is on a wage or salary. You can normally find this figure on your PAYE records (P11, P60) or HMRC Real Time Information summary sheets. What must be included in box A? All emoluments* Gross taxable payments made to employees Gross taxable payments to directors (limited companies only**) Payments to all construction and non-construction staff Payments to trainees All bonus payments Taxable redundancy payments Statutory sick and maternity payments that appear on P60s construction establishment, enter the number in the box and list the names, addresses, VAT registration numbers and HMRC Unique Tax Reference numbers (UTR) on page 2 of the Levy Return or on a separate sheet attached firmly to your Levy Return. Payments should be in whole pounds and not include pence. DO NOT include in box A: Pensions Employer s National Insurance Contributions (NIC) Sole trader and partner drawings Dividends Payments to self-employed workers, sub-contractors or agency staff If you have entered 0 into box A, please tell us, in the space provided, why no payments have been made. What must be included in box B? State the average number of employees on the payroll during the year, whose payments make up the total shown in box A Part-time employees should be counted as appropriate fractions of full-time employees *The legal definition of emoluments is: salaries, fees and wages excluding fees which are paid to a company director who is remunerated solely by fees; any gratuity or other profit or incidental benefit of any kind obtained by an employee, if it is money or money s worth, other than pensions contributions; anything else that constitutes, or is intended to constitute, earnings of the relevant employment. **Private companies are required by law to have at least one director. Public companies are required by law to have at least two directors and a company secretary. A director occupied in the day to day activities of a company is highly likely to be an employee with an implied contract of service, despite any shareholding or self-employed status for National Insurance purposes. This view has been confirmed by employment tribunals on appeal Levy Return Guidance Notes 9

10 10 Section 4: Construction Industry Scheme (CIS) payments and status This section identifies the payments made to CIS sub-contractors and your businesses CIS tax status. Part of the Levy is calculated based on payments made to net paid (CIS taxable) sub-contractors. This means you will pay Levy on the taxable element of payments made to taxable sub-contractors (CIS). Levy will not be assessed on any payments made to gross paid CIS sub-contractors. Box C: Total tax deducted In box C you can simply declare the Total tax deducted figure totalled from each of the CIS300/online contractor monthly returns that your business submitted in the year to 5 April This figure will be grossed up by CITB at 20% (multiplied by 5) to arrive at the taxable payment and Levy will be calculated on the resulting sum. Name Verification Number Total payments made (does not include VAT) Cost of materials (paid for by sub-contractor) Total tax deducted 123 Building V Services Ltd 456 Electricals V Limited Bloggs, Joe V Burn, Steve V , Totals 8, , Box D: Total CIS payments Please provide the total of all payments (before deductions) to all CIS sub-contractors. This figure can be found in the column headed Total payments made (does not include VAT) on the 12 monthly CIS300/online contractor returns that you have submitted to HMRC in the year to 5 April This information will be used for verification and analysis purposes. Name Verification Number Total payments made (does not include VAT) Cost of materials (paid for by sub-contractor) Total tax deducted 123 Building V Services Ltd 456 Electricals V Limited Bloggs, Joe V Burn, Steve V , Totals 8, , Box E: CIS status This refers to the current CIS status of your business when/if you are paid by a main contractor. Please state if your business is paid gross (without CIS tax deducted) or net (with CIS tax deducted) when working for a main contractor. This information will be used for verification and analysis purposes. Box F: Payments to taxable sub-contractors less materials If you employ any sub-contractors who have tax deducted at the temporary rate of 30%, you may also wish to complete box F. This section explains how we gross up the tax in box C, the impact this has on sub-contractors taxed at 30% and how to complete box F. Levy is calculated based on the payments made to net paid (CIS taxable) subcontractors; we ll refer to this as the gross taxable amount. To calculate the gross taxable amount CITB will multiply the tax figure provided in box C by 5, which we refer to as grossing up. Using the figures in Table A this would work out as follows:

11 Table A Name Verification Number Total payments made (does not include VAT) Cost of materials (paid for by sub-contractor) Total tax deducted 123 Building V Services Ltd 456 Electricals V Limited Bloggs, Joe V Burn, Steve V , Totals 8, , Total of tax deducted 500 x 5 = 2,500 (gross taxable amount). CITB would then raise the Levy on the gross taxable amount of 2,500 at the legislated rate. For the 2016 Levy this rate was 1.25% so would have created the following bill for the CIS section of the 2016 Levy Return - 2,500 x 1.25% = However if some or all sub-contractors have had tax deducted at the HMRC temporary rate of 30%, when CITB multiply the tax figure by 5 this will incorrectly inflate the gross taxable amount, as follows: Table B Gross taxable amount 1,000 1,000 Taxable rate 20% 30% Total tax deducted Result of CITB grossing up (multiplying by 5) 1,000 1,500 CITB Levy payable based on 2016 Levy return rate of 1.25% In Table B above, both examples have a gross taxable amount of 1,000 but they have different rates of tax deducted. When the tax is deducted at 30% and then grossed up by 20%, i.e. multiplying by 5, the gross taxable amount calculated becomes 1,500. The resulting Levy payable is therefore higher than it should be. To prevent this happening, you can provide the actual gross taxable payment figure yourself instead of CITB grossing up for you; this can be entered in box F. Please note completing box F is optional whereas boxes C, D & E must still be completed. To calculate the gross taxable payment please remember the Total payments made (does not include VAT) column includes the cost of materials and these should not be included in the figures entered in box F. We ll use the figures in Table A above to demonstrate how to remove the cost of materials for the box F figure. Company Calculation Result 123 Building Services Ltd 1,000 minus 0 materials 1, Electricals Ltd Do not include this is a gross paid sub-contractor Do not include Bloggs, Joe 500 minus 500 materials 0 Burn, Steve 1600 minus 600 materials 1,000 Box F Total - 2,000 If completing box F please carry out this calculation monthly for each sub-contractor on a line by line basis as not all sub-contractors who are included in the monthly Total payments made (does not include VAT) figure are taxed or provide materials. Please do not subtract the total monthly Cost of materials (paid for by sub-contractor) from the total monthly Total payments made (does not include VAT) as this may result in an inaccurate Levy bill Levy Return Guidance Notes 11

12 Section 5: Declaration Once all sections of the form have been completed, the declaration needs to be signed by a director, company secretary or someone in a similar position of responsibility. If you are unsure about anything, please refer to the relevant page in this booklet, phone our Customer Services team on or us at levy.grant@citb.co.uk Note: The declaration is on page 2 on your Levy Return. Please make sure you turn your Levy Return over and complete the declaration before sending it back to us. Checklist Before signing the declaration on page 2 of your Levy Return (section 5), please check that you have: Completed all the boxes (including VAT and UTR details) Checked that your business name and contact details are correct Amended your business details in the membership of employer organisations section (1a) Included your directors wages in section 3 of the Return if your business is a limited company Explained why, if you have declared nil payroll in section 3 Put your name and CITB registration number on any continuation sheets and securely attached them to the Return Written any amounts in whole pounds only and not included pence Read the legal statement on page 3 We recommend you keep a copy of the signed CITB Levy Return for your records. 12

13 Example of a completed Levy Return 123 Building Services Ltd The main activity of123 Building Services Ltd is general building. The company is a member of both the Federation of Master Builders (FMB) and the Home Builders Federation (HBF). 123 Building Services Ltd has one establishment and employs 58 people, including Stan and his son Robert. The wage bill for 123 Building Services Ltd for the year ended 5 April 2017 came to 901,844 (box A of the Levy Return), made up of the following: Directly employed staff 819,802 Directly employed administration staff 27,042 Directors (Stan and Robert) 55,000 The total tax deducted from their net paid sub-contractors (box C) was 15, Building Services Ltd made total CIS sub-contractor payments of 250,000 (box D) for the year ending 5 April These payments were made to gross paid and net paid sub-contractors. 123 Building Services Ltd were paid gross (box E) by main contractors under CIS. The Levy Return is completed by the firm s accountant, Mrs Singh, who is not authorised by123 Building Services Ltd to sign the Levy Return so she passes it to Stan to check and sign as shown below Levy Return Guidance Notes 13

14 It s important to be accurate Our staff check and verify the information given in Levy Returns and claims made under the CITB Grants Scheme. They help employers understand what is required on their Levy Returns and visit employers to check that the information they have provided on grant claims and Levy Returns is accurate. They also visit employers who have not sent in a completed Levy Return. You must keep detailed records of your payroll and sub-contractor payments for at least three years. Incorrect or incomplete information is likely to result in a verification visit. Legislation states that we may ask to see all records relevant to the accurate completion of the Levy Return. If you knowingly give wrong or incomplete information you could be fined, go to prison, or both. Privacy notice CITB (the Construction Industry Training Board registered as a charity in England and Wales with Reg No and in Scotland with Reg No SC044875) will use your personal data as stated below. Your personal data is information which identifies and relates to you and includes information we obtain directly from you or from third parties, or as a result of our relationship with you in our capacity as a Sector Skills Council and Industrial Training Board and in providing goods and services to you. We may use your personal data for the purposes of administering Levy and grant and for all other purposes connected with our role as a Sector Skills Council and Industrial Training Board and in providing goods and services to you. We may disclose your information to third parties or agents for the purposes outlined above, but we will not otherwise pass your personal data to third parties for marketing purposes. You have a right to request a copy of any personal data we hold about you (for which we may charge a small fee) and to correct any inaccuracies in your data. If you have any queries about completing your Levy Return after reading this guide, please call our Customer Services team on or us at levy.grant@citb.co.uk 14

15 Useful tips to complete your 2017 Levy Return Section 3 1 HMRC end of year and end of month returns Keep copies of all documents sent to HMRC, i.e. all PAYE Real Time Full Payment Submissions (FPS), P60s, P11s and all CIS300s Include all employees paid during the tax year both current employees and leavers Use these returns as your main reference for PAYE payments Do not include the gross taxable pay from previous employments Complete your Levy Return soon after completing your HMRC April PAYE Full Payment Submission 2 Computerised payroll If your payroll is computerised and has the facility to produce an end of year report that shows the gross taxable pay in this employment, please produce it. This is not required for HMRC declaration, but will easily provide the gross payroll figure needed for the Levy Return Ensure the report includes amounts for leavers during the year, not just staff employed on 5 April Ensure payroll declarations include PAYE payments to directors and all non-construction staff, bonuses, taxable expenses and all other taxable payments. Please see page 9. Section 4 4 Take the following figures from the 12 monthly CIS300/online contractor returns that your business submitted to HMRC in the year to 5 April 2017 Box C: Total Tax Deducted Adding together the Total tax deducted figure from each of the 12 monthly CIS300/online contractor returns your business has submitted to HMRC in the year will give you an annual Total tax deducted figure Box D: Total of all payments (before deductions) to all sub-contractors paid through CIS Add together the Total payments made (does not include VAT) figure to give you an annual figure Box F: Payments to taxable sub-contractors less materials If completing this section please carry out this calculation for each sub-contractor on a line by line basis as not all sub-contractors who are included in the total figure have tax deducted or provide materials -see page 10 for more guidance 2017 Levy Return Guidance Notes 15

16 If you have any queries about completing your Levy Return and cannot find the answer in these Guidance Notes, please contact our Customer Services team on or us at NFP (01/17) citb.co.uk CITB is a registered charity in England and Wales (Reg No ) and in Scotland (Reg No SC044875). Printed on material with a minimum of 75% recycled content.