The Construction Industry Training Board (CITB) levy is a cornerstone of skills development in the UK construction sector, ensuring that employers contribute to, and benefit from, a robust training ecosystem. Whether you’re a large contractor or a small subcontractor, understanding how the levy is calculated, who it applies to and how you can maximise your return is vital. In this article, we’ll walk you through the key elements of the CITB levy, highlight exemption thresholds and reliefs, and explain how the funds you pay are reinvested to support apprenticeships and workforce competency.
What is the CITB levy?
The CITB (Construction Industry Training Board) levy is a mandatory payment imposed on employers (which qualify) in the construction industry in the UK to fund training and skills development.
The funding raised from the CITB levy is used to improve the skills and competency of the workforce in the construction industry, encourage apprenticeship programs and promoting the construction industry as a solid career path.
Who does the levy apply to?
The levy applies to all employers who engage mainly in construction activities. This is defined as construction work taking up more than half of total employees’ time, this includes subcontractors.
All employers are required to be assessed and complete a Levy Return under the Industrial Training Act 1982. This is so that the amount of levy owed can be ascertained by CITB.
How much is it?
The levy is calculated based on the total wage bill for the financial year. The levy rates for the 2025 Assessment are proposed as 0.35% for payroll staff and 1.25% for CIS subcontractors from whom CIS deductions are taken from.
There are certain exemptions for small businesses for the CITB levy. If a business’ total wage bill is under £150,000, there is no levy payable for that year, this is referred to as the “Small Business Levy Exemption”. Even if you are exempt from the levy, a CITB Return must still be completed.
If a business’ total wage bill is between £150,000 and £499,999, the organisation will receive a 50% reduction on the CITB levy. This is called the “Small Business Levy Reduction”.
This could ultimately lead to your total levy owed doubling if you have paid £1 over £499,999.
There is a levy calculator available on the CITB website here.
source: https://www.citb.co.uk/levy-grants-and-funding/citb-levy/about-the-citb-levy/
How are funds Redistributed?
From the above table, funds collected by employers aren’t redistributed equally and disproportionately benefit smaller employers. This is because almost two thirds of apprenticeships in the construction industry are offered by this group of employers, this therefore leads to more grants and funding for this cohort.
What is a Levy Assessment Notice?
Employers receive a Levy Assessment Notice once a year, this contains details of how much levy is owed and when it needs to be paid. If you haven’t completed your Levy Return before the Levy Assessments are raised by CITB, you will instead be sent an estimated assessment based on the prior year’s figures. However, the Levy Return can still be completed once the estimate is received to ensure that the correct assessment is made before paying the levy.
What if i would like to Challenge my Registration?
If you believe your business is not wholly or mainly engaged in construction industry activities and is incorrectly registered for CITB Levy, a levy registration review form can be completed to enable CITB to assess the main activity of the business further.
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