Apprenticeships: construction firms forced to pay two levies

Some 900 large firms will have to pay a minimum of £30,000 when the apprenticeship levy is introduced in April 2017, the CITB confirms

Will Martin

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Hundreds of construction firms will be forced to pay two apprenticeship levies simultaneously for at least a year, it has been announced.

With the government's apprenticeship levy due to be introduced in April 2017, concerns had been raised about what would happen to large employers in the construction industry which have contributed to the Construction Industry Training Board (CITB) levy for half a century. 

Now the CITB has confirmed that construction firms with a payroll of more than £3 million will be required to pay out for both levies until March 2018. While the government levy has been set at 0.5 per cent of an employer's pay bill, large firms in the building industry will have to pay another 0.5 per cent towards the CITB levy. A company with a payroll of £3 million, therefore, will have to pay £30,000 in annual training levies.

The double levy will remain for at least 12 months while the CITB carries out a consultation on the amount firms should contribute to the training body in future, with a new levy arrangement to be brought into law in the spring of 2018, 

Construction News has estimated that up to 900 companies will be expected to pay the double levy, after the Department for Business, Innovation and Skills and the CITB agreed on a transition scheme after four months of talks.

'Some companies will be concerned'

Steve Radley, head of policy at the CITB, told TES that a 12-month "transition package" that will coincide with the introduction of the apprenticeship levy had been drawn up to mitigate the impact for affected companies. It will give companies with a pay bill of £3 million or more “an enhanced rate of grants for the training activity they do”.

“What the transition package is aiming to do is to as much as possible mitigate the impact of paying the two levies to just that 12-month period, so from April next year to the end of March 2018. And then after that hopefully we’ll have a new levy order in place,” Mr Radley said.

“Inevitably there will be some companies that will be concerned until they see the details of the transition package, but overall we’d expect there to be a positive reaction to this because this is the timeline companies said they wanted to follow.”

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Will Martin picture

Will Martin

Will is a junior reporter at TES

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