At a glance: The CITB Levy is a statutory charge on UK construction employers — currently 0.35% on PAYE payroll and 1.25% on net CIS sub-contractor payments. It funds grants, apprenticeships and training across the industry. This guide covers who pays, how it is calculated, how to complete your CITB Levy Return, how to claim a CITB grant, and what is changing in 2026.
Contents
- What is the CITB Levy?
- Who Pays the CITB Levy?
- CITB Levy Rates and Exemptions (2025–2026)
- Using the CITB Levy Calculator
- The CITB Levy Return: Deadlines and How to Complete It
- Your CITB Levy Number
- How to Pay the CITB Levy
- CITB Levy Grants: What You Can Claim Back
- Types of CITB Grant
- CIS Sub-Contractors and the CITB Levy
- How to Appeal a CITB Levy Assessment
- The Benefits of the CITB Levy
- Concerns and Criticism of the Levy
- 2025–2026: What Is Changing?
- Frequently Asked Questions
What Is the CITB Levy?
The CITB Levy — formally the Construction Industry Training Board Levy — is a statutory training charge imposed on employers who operate in the construction industry in England, Scotland and Wales. It is collected under the authority of the Industrial Training Act 1982 and renewed every three years through a Levy Order laid before Parliament.
The Construction Industry Training Board (CITB) was established on 21 July 1964, one of 21 industry training boards created by the original Industrial Training Act 1964. When most of the other boards were abolished during the 1980s, construction successfully made the case for retention. The argument that still underpins the levy today is a classic “market failure” one: because the construction industry is dominated by small firms, high labour turnover, short contracts and widespread sub-contracting, left to their own devices employers will consistently under-invest in training, preferring to poach skilled workers from competitors rather than fund the costly early years of apprenticeships themselves. The levy forces collective investment to break that cycle.
CITB is an executive non-departmental public body and a registered charity (No. 264289), now sponsored by the Department for Work and Pensions. It is one of only two surviving industrial training boards in the UK — the other being the Engineering Construction Industry Training Board (ECITB) — and in 2025–26 it manages a combined levy income and grant expenditure programme touching over 75,000 registered employers.
Put simply: what is the CITB Levy? It is the mechanism by which the British construction industry pays for its own workforce development, redistributing money from employers into training grants, apprenticeship support, qualifications infrastructure and research into skills shortages.
Who Pays the CITB Levy?
The CITB Levy applies to all employers “engaged wholly or mainly in construction industry activities.” In practice, this means that if construction work accounts for more than 50% of your employees’ total working time — including the time of sub-contractors you engage — you are required to register with CITB and submit an annual Levy Return.
The activities covered are defined by Schedule 1 of the Industrial Training (Construction Board) Order 1964 (as amended by the 1992 Scope Order) and include:
- Building construction, alteration, maintenance, repair and demolition
- Civil engineering (roads, bridges, tunnels, drainage)
- Installation and maintenance of contractors’ plant and equipment
- Scaffolding hire and erection
- Preparation and dressing of building stone
- Roofing, flooring and interior fit-out carried out by specialist sub-contractors
Importantly, mechanical and electrical contractors generally fall outside CITB scope, even though they operate within HMRC’s Construction Industry Scheme (CIS). This creates a well-known mismatch between the two regimes that has been a recurring source of confusion and dispute. Labour agencies and umbrella companies are in scope where the majority of their workers’ time is spent on construction activities.
Approximately 75,000 employers are currently registered with CITB. Around 69% of them fall below the small business threshold and pay no levy at all, though they are still required to submit a Levy Return each year.
CITB Levy Rates and Exemptions (2025–2026)
The CITB Levy rates have remained stable since the 2017 simplification reforms. The levy is calculated on two separate bases, reflecting the two main categories of worker in construction:
| Worker type | What is levied | Current rate |
|---|---|---|
| Directly employed staff (PAYE) | Total gross taxable earnings paid through payroll, including working directors and any IR35 off-payroll workers deemed employed. Excludes employer NICs, pension contributions, dividends and genuine agency workers. | 0.35% |
| Net-paid CIS sub-contractors | All payments to sub-contractors from whom you deduct CIS tax at 20% or 30%, after deducting the cost of materials. Does not apply to sub-contractors with HMRC Gross Payment Status. | 1.25% |
The higher rate on CIS sub-contractors reflects the fact that those workers often receive no direct training investment from the contractor engaging them, so the levy compensates for that gap in the funding chain.
Small Business Exemption and Reduction
Under the current 2025 Levy Order (based on 2023/24 pay data, assessed in spring 2025), the thresholds are:
| Total wage bill (PAYE + Net CIS) | Levy outcome |
|---|---|
| Under £135,000 | Exempt — no levy to pay (Levy Return still required) |
| £135,000 – £449,999 | 50% reduction on the calculated levy amount |
| £450,000 and above | Full levy payable at 0.35% PAYE + 1.25% net CIS |
Under the proposed 2026–29 Levy Order, expected to be confirmed in spring 2026 following successful Consensus 2025 (in which 67% of levy-paying employers voted in favour), the thresholds will rise:
| Total wage bill (2026 Order) | Levy outcome |
|---|---|
| Under £150,000 | Exempt |
| £150,000 – £499,999 | 50% reduction |
| £500,000 and above | Full levy |
The levy rates of 0.35% and 1.25% are unchanged in the 2026–29 proposals. The raised thresholds will bring more small businesses into the exemption zone without altering the fundamental cost structure for medium and large employers.
Practical example: A roofing contractor with a PAYE payroll of £600,000 and £150,000 of net CIS payments would pay: (£600,000 × 0.35%) + (£150,000 × 1.25%) = £2,100 + £1,875 = £3,975 per year.
Using the CITB Levy Calculator
CITB provides a free online CITB Levy Calculator at citb.co.uk to help employers estimate what they will pay before their formal Levy Assessment Notice arrives. The calculator is a planning tool, not a binding assessment, but it is useful for budgeting and for checking whether a particular change in headcount or sub-contractor spend would push a business across an exemption threshold.
To use the CITB Levy Calculator accurately you will need:
- Total gross PAYE wages paid during the relevant tax year (6 April to 5 April)
- Total net payments to CIS sub-contractors from whom you deducted tax at 20% or 30%, minus the cost of materials they supplied
- Confirmation of whether any CIS sub-contractors hold HMRC Gross Payment Status (these are excluded)
The calculator then applies the current exemption thresholds automatically, so you can instantly see whether your bill falls to zero, is halved, or is assessed in full. For businesses that sit close to a threshold, the tool is particularly valuable — a relatively modest change in wage spend can move a firm from half-rate to full levy, or from exempt to the reduced band.
Bear in mind that the calculator reflects the current year’s thresholds. As the 2026 Order raises the exemption to £150,000, businesses with wage bills between £135,000 and £150,000 who currently pay a reduced levy may find themselves exempt from 2026 onwards.
The CITB Levy Return: Deadlines, Process and How to Complete It
The CITB Levy Return is the annual declaration that every CITB-registered employer must submit, regardless of whether they owe any money. It is the document from which CITB calculates your Levy Assessment. Missing or incorrectly completing a Levy Return has significant consequences for your grant eligibility, so understanding the process is essential.
Who must submit a CITB Levy Return?
All CITB-registered employers — including those who are dormant, those who are exempt from paying, and those who had zero payroll activity during the year — must submit a Levy Return. Failure to do so is a statutory breach under the Industrial Training Act 1982, not merely an administrative oversight.
When are Levy Returns issued and what are the deadlines?
CITB issues Levy Return forms by post each spring, covering the preceding tax year. The critical dates for the 2025 Levy Return (based on 2024/25 pay data) are:
| Date | What happens |
|---|---|
| Spring (May) | Levy Return form issued to all registered employers |
| 30 June | Deadline to submit: missing this date means all grant claims are withheld until the return is received |
| 30 November | Hard deadline: missing this date means your eligibility for all grants for that year is permanently lost |
| Spring (following year) | Levy Assessment Notice issued, showing what you owe |
? Warning: If you fail to submit your Levy Return before assessment takes place, CITB will issue an estimated assessment based on previous years’ data, which may well overstate your true liability. You can appeal an estimated assessment, but it adds time and administrative cost.
How to complete your CITB Levy Return
You can submit your Levy Return online via CITB’s online portal or return the paper form by post. The form asks you to declare:
- Section 1: Business details, main construction activity, and any Prescribed Organisations you belong to
- Section 2 (Box A/B): Total gross PAYE earnings for the year — this goes directly into the 0.35% calculation
- Section 3 (Boxes C–F): Payments to net-paid CIS sub-contractors. Box C covers sub-contractors taxed at 20%; if you also made payments to sub-contractors deducted at 30%, use Box F to declare the combined correct figure less materials, to avoid being over-assessed
- Section 4: Number of employees — for CITB’s statistical records only; does not affect your levy bill
- Section 6: Declaration and signature
The most common error on Levy Returns is failing to use Box F for sub-contractors taxed at 30%. Because the formula in Box C assumes a 20% deduction rate, omitting Box F will result in a Levy Assessment that is higher than it should be. Keep payroll records and CIS300 returns for at least three tax years, as CITB may request supporting evidence during verification.
Your CITB Levy Number
When you first register with CITB, you are assigned a unique CITB Levy Number (also referred to as your CITB Registration Number). This number identifies your organisation across all of CITB’s systems — the levy portal, the grants portal, the Construction Training Register and CITB’s internal records. It appears on your Levy Assessment Notices and any correspondence from CITB.
You will need your CITB Levy Number when:
- Logging in to the CITB online services portal to submit a Levy Return or track grant claims
- Registering additional establishments under the same CITB registration
- Contacting CITB’s Levy team at levy.grant@citb.co.uk about a query or a payment
- Requesting reissue of a Levy Assessment Notice
If you have misplaced your CITB Levy Number, it can be retrieved by contacting CITB directly or by logging in to the CITB online portal. If your business changes legal structure, name or ownership, you must notify CITB promptly, as these changes can affect your registration status and the validity of your Levy Number.
How to Pay the CITB Levy
Once your Levy Assessment Notice is issued (normally in spring), you have one month to either pay in full or set up an instalment plan. There are two payment options:
- Interest-free Direct Debit: Payments are spread across up to 10 monthly instalments, normally collected between May and February. Once set up, and provided you submit future Levy Returns on time, the Direct Debit rolls forward automatically from year to year.
- Lump-sum payment: Bank transfer details are provided on your Levy Assessment Notice. This option suits firms with strong cash flow who wish to clear the liability in one go.
To set up a Direct Debit, download the mandate from citb.co.uk and return it by post or email to levy.grant@citb.co.uk. You must have either paid in full or made appropriate Direct Debit arrangements to remain eligible for grant payments. Unpaid levy is recoverable as a civil debt through the courts.
CITB Levy Grants: What You Can Claim Back
One of the most important — and most underused — aspects of the CITB Levy is the ability to claim back money through the CITB Levy Grant scheme. In 2024–25, CITB paid out approximately £129.8 million in direct grants, yet of the 75,000-plus registered employers, only around 21% actually made a grant claim in any given year. Many businesses — particularly smaller contractors — pay the levy without realising the full extent of what they can recover.
To be eligible for CITB grant payments, you must:
- Be registered with CITB
- Have submitted your Levy Return by 30 June of the relevant year
- Have paid your levy (or set up a Direct Debit) in accordance with your Levy Assessment Notice
- Be training workers who are directly employed by you
Types of CITB Grant
CITB offers several categories of CITB grant, each targeting different training activities. Note that the grant scheme was significantly restructured from January 2026 — see the changes section below for full details.
Short Qualification Grants
Previously the most widely-used grant for everyday construction training, these covered short health, safety and skills courses. From 8 January 2026, CITB removed most short-course achievement grants as part of a major funding overhaul. A reduced grant of up to £600 is retained for certain short qualifications. Check the current grant schedule at citb.co.uk for the live list of eligible courses and rates.
Qualification Grants (Long Awards)
Achievement grants are available for recognised construction qualifications — NVQs, SVQs, and other regulated awards — including site management, plant operations, and supervisory roles. Post-January 2026, a cap of £600 applies to non-apprentice achievement grants, though core qualification routes remain supported.
Apprenticeship Grants
Apprenticeship support is the most significant element of the CITB grant scheme and has been least affected by the December 2025 changes. CITB offers:
- £2,500 per year attendance grant per construction apprentice
- £3,500 achievement grant on successful completion
- 80% of accommodation and travel costs for apprentices training at the National Construction College
- An additional £2,000 grant for Interior Systems Installer apprentices
Skills and Training Fund
This fund previously offered smaller businesses a top-up grant — ranging from £2,500 for CIS-only firms up to £25,000 for businesses with 200–250 employees — to invest in workforce development. It was closed as part of the December 2025 restructure. CITB has indicated that alternative support for SMEs is under review.
Leadership and Management Development Fund
Larger employers could access up to £100,000 for leadership and management training programmes. This was restructured in late 2025, with large employers excluded from Employer Networks from April 2026. Contact CITB directly for current eligibility under the Large Employer Fund arrangements.
Employer Networks
CITB funds regional Employer Networks that co-ordinate shared training delivery, match-fund employer investment and pool purchasing power. From April 2026, these are refocused on SME members.
Industry Impact Fund
For organisations seeking to develop innovative training solutions, the Industry Impact Fund offers grants of up to £500,000 for projects generating sector-wide benefits. Check citb.co.uk for current application windows.
CIS Sub-Contractors and the CITB Levy
The interaction between HMRC’s Construction Industry Scheme (CIS) and the CITB Levy is one of the most technically demanding aspects of the levy for many businesses. The key rules are:
- If you deduct CIS tax from a sub-contractor at 20% or 30%, the net payment (minus materials) is subject to the 1.25% levy
- If a sub-contractor holds HMRC Gross Payment Status and you pay them without deduction, no levy applies — they are responsible for paying levy on their own workforce
- If you are unsure of a sub-contractor’s CIS status, treat them as net-paid until you receive confirmation
CITB firmly advises against deducting the levy from sub-contractors’ pay. The levy is a statutory liability on the registered employer, and there is no legal authority to pass it down the supply chain through a deduction from sub-contractor invoices.
The higher rate on CIS payments (1.25% versus 0.35% on PAYE) was a deliberate policy decision introduced in the 2015–16 Levy Simplification reforms, replacing a more complex system of labour-only sub-contractor levies and LOPR offsets that had existed previously.
How to Appeal a CITB Levy Assessment
If you believe your Levy Assessment is incorrect — whether because you dispute your “wholly or mainly construction” status, believe your wage figures have been miscalculated, or have received an estimated assessment you disagree with — there are two routes available.
Informal Route (via CITB)
Contact CITB directly at levy.grant@citb.co.uk. You can request a Levy Registration Review if you dispute the “wholly or mainly” test, or submit a corrected Levy Return with the figures you believe to be accurate. If the issue remains unresolved, CITB’s Complaints Policy allows escalation up to the CEO level.
Statutory Route (Employment Tribunal)
Under Section 12 of the Industrial Training Act 1982 and Article 15 of the relevant Levy Order, you have the right to appeal to the Employment Tribunal. The appeal must be lodged within one month of the Levy Assessment Notice. The Tribunal can confirm, vary or quash the assessment. Take legal advice before proceeding, as pursuing this route does not automatically pause the payment obligation.
Recent case law demonstrates that technical appeals rarely succeed. In January 2025, the Court of Appeal unanimously upheld CITB’s position in the long-running Hudson Contract case, rejecting a challenge to CITB’s grant-withholding decisions. Businesses considering formal challenges should ensure they have clear, documented grounds rather than relying on general arguments about the levy’s fairness.
The Benefits of the CITB Levy for Construction Employers
When it works well, the CITB Levy delivers genuine value to the construction industry in ways that individual employer investment cannot easily replicate. Key benefits include:
- Pooled funding for apprenticeships: The levy underwrites more than £77 million of apprenticeship support annually, enabling smaller firms to take on apprentices they might not otherwise be able to afford.
- Qualification infrastructure: CITB funds the development of occupational standards, NVQs and SVQs that underpin the entire skills certification system in construction.
- National Construction College: CITB operates training campuses at Erith, Bircham Newton and Inchinnan, with a £39 million upgrade programme running to 2028, offering specialist plant, scaffolding and trades training.
- Workforce research: The Construction Workforce Outlook 2025–29 projects that the industry needs to recruit 251,500 additional workers over the period to meet housebuilding and infrastructure targets — intelligence that informs both government policy and business planning.
- Careers promotion: CITB funds Go Construct and the Homebuilding Skills Hubs (£40 million), helping to widen the recruitment pool and address under-representation of women and ethnic minorities in the industry.
- Equal access regardless of firm size: A small groundworks contractor paying £500 in levy can claim the same per-apprentice grant rates as a major developer paying tens of thousands.
Concerns and Criticism of the CITB Levy
The CITB Levy has attracted persistent and, in some quarters, intense criticism throughout its history. Understanding these concerns is important for any employer deciding how to engage with CITB or whether to push for reform through their trade association.
The December 2025 Grant Cuts
The most acute recent controversy erupted on 8 December 2025, when CITB announced — effective 8 January 2026 — the removal of nearly all short-course training grants, the closure of the Skills and Training Fund, and the exclusion of large employers from Employer Networks. The stated reason was a 36% surge in grant claims against a static levy income. The industry reaction was fierce: a CITB Funding Committee member resigned publicly, stating the cuts would “widen the skills gap rather than narrow it.” Critics pointed out that CITB held nearly £79 million in reserves — well above its self-imposed £50 million floor — and questioned why reserves were not deployed to bridge a temporary demand spike.
The Grant Claim Gap
A fundamental tension in the levy system is the gap between who pays and who claims. Of 75,000-plus registered employers, only around 21% claimed grants in any year. Critics — notably the Federation of Master Builders and National Federation of Builders — argue that the levy effectively acts as a tax on small firms that lack the administrative capacity to navigate the grant application process, while larger employers with dedicated training departments harvest a disproportionate share of the pot.
The Dual Levy Burden
Large construction employers with pay bills over £3 million pay both the CITB Levy and the Government’s Apprenticeship Levy (0.5% on the total UK pay bill). This means some of Britain’s largest contractors are paying two separate training levies simultaneously, with imperfect coordination between them.
Administrative Complexity for Small Firms
Despite successive “simplification” reforms, many smaller construction firms still find the levy process burdensome. The interaction between CIS status, PAYE records and the Levy Return requires careful bookkeeping, and errors — particularly around the Box C/Box F sub-contractor calculation — are common.
Concerns About CITB’s Own Efficiency
Between 2022 and 2025, CITB’s staff costs grew from £46 million to £52 million and headcount rose by 13% to 861, while grant expenditure rose by only £1.2 million year on year. Ofsted downgraded CITB’s training delivery from “Outstanding” (2017) to “Requires Improvement” (2023), recovering to “Expected standard” in February 2026. A £10.3 million clawback to the ESFA over historic apprenticeship data compliance failures also damaged institutional trust.
Calls for Abolition or Radical Reform
A survey by Hudson Contract found that 74% of construction leaders wanted CITB scrapped. The House of Lords Built Environment Committee declared in 2022 that CITB “has not addressed construction skills shortages in an effective manner over many years.” Mark Farmer’s 2025 review of industrial training boards called for a “fundamental reset,” and the DWP launched a formal consultation in March 2026 on whether CITB and ECITB should be merged into a single body.
2025–2026: What Is Changing with the CITB Levy?
The period from 2025 to 2026 is one of the most significant in the CITB Levy’s recent history. Construction employers should be aware of the following key developments:
- Consensus 2025 achieved: In May 2025, CITB secured the necessary industry Consensus (67% employer support by number, 72% by levy value) for its 2026–29 levy proposals, allowing the levy to continue.
- 2026–29 Levy Order pending: The new Order will raise the small business exemption threshold from £135,000 to £150,000 and the 50% reduction band ceiling to £499,999. Rates stay unchanged at 0.35% PAYE and 1.25% net CIS. Confirmation expected spring 2026.
- Grant restructure from January 2026: Most short-course grants were abolished from 8 January 2026. Apprenticeship grants remain the primary route for employers seeking a strong return on their levy payments.
- CITB/ECITB merger consultation (March 2026): The DWP opened a public consultation on 23 March 2026 on whether to merge CITB and ECITB into a single construction and engineering training board — potentially the most significant structural change to the levy regime since the 1980s.
- Sponsoring department change: CITB moved from the Department for Education to the Department for Work and Pensions in 2025, signalling a shift in emphasis toward labour market outcomes.
Frequently Asked Questions
What is the CITB Levy and do I have to pay it?
The CITB Levy is a statutory training charge on UK construction employers. You must pay it if your business is “wholly or mainly” engaged in construction activities — meaning more than 50% of your employees’ working time is spent on construction. You must register with CITB and submit an annual Levy Return even if you are below the small business exemption threshold and owe nothing.
What are the current CITB levy rates?
The current CITB levy rates are 0.35% on PAYE payroll and 1.25% on net CIS sub-contractor payments (i.e., payments to sub-contractors taxed at 20% or 30% under CIS, minus the cost of their materials). These rates are unchanged under the proposed 2026–29 Levy Order.
Is there a CITB Levy exemption for small businesses?
Yes. Under the 2025 Levy Assessment, businesses with a total wage bill (PAYE plus net CIS) under £135,000 pay nothing. Those between £135,000 and £449,999 pay half the calculated levy. From 2026, these thresholds rise to £150,000 and £499,999 respectively. You must still submit a Levy Return even if you are fully exempt.
How do I complete a CITB Levy Return?
Complete and submit the annual return issued each spring — online or by post. Declare your total PAYE wages (Box A/B) and net CIS payments less materials (Box C, with Box F used if any sub-contractors were taxed at 30%). Submit by 30 June to protect grant eligibility. The hard deadline beyond which all grant eligibility for the year is lost is 30 November.
Can I claim a CITB grant if I am exempt from the levy?
Yes. Grant eligibility is linked to being a registered employer with a current Levy Return on file, not the size of your levy bill. Even if your bill is nil because you are below the exemption threshold, you can still apply for grants — provided your Levy Return has been submitted on time.
What CITB grants are available in 2025–2026?
Following the January 2026 changes, the most significant grants are the apprenticeship attendance grant (£2,500/year) and achievement grant (£3,500), plus qualification achievement grants (up to £600 for most non-apprentice routes). The Skills and Training Fund has closed. Always check the current grant schedule at citb.co.uk.
What is my CITB Levy Number and where do I find it?
Your CITB Levy Number is the unique registration identifier assigned when your business first registered with CITB. It appears on your Levy Assessment Notices. You can also find it by logging in to the CITB online portal, or by contacting levy.grant@citb.co.uk.
Do CIS sub-contractors with Gross Payment Status pay the levy?
Not through you. If a sub-contractor holds HMRC Gross Payment Status and receives payments without CIS deduction, the 1.25% levy does not apply to those payments. However, if that sub-contractor is itself a registered construction employer with its own PAYE workers, it is responsible for paying levy on its own workforce.
Are the CITB Levy and the Government Apprenticeship Levy the same thing?
No — they are two entirely separate charges. The Government Apprenticeship Levy is 0.5% on the total UK payroll of businesses with pay bills over £3 million, collected by HMRC. The CITB Levy is specific to the construction sector, calculated on both PAYE and CIS at different rates, and managed by CITB. Large construction employers may be liable for both simultaneously.
This article is for general information only and reflects CITB Levy rules as of April 2026. Levy rates, thresholds and grant availability are subject to change. Always check the current position at citb.co.uk or seek professional advice for your specific circumstances.
