Late payers of training levy face clampdown

Contractors will be charged interest and taken to court if they fail to pay their Construction Industry Training Board (CITB)-ConstructionSkills levy on time.

From next year, 8% interest will be charged from the due date on all debts subject to legal proceedings in an effort by ConstructionSkills to claw back cash spent chasing levy defaulters.

The training body said each year it spent a "significant" amount on legal costs pursuing those who refused to pay the levy.

ConstructionSkills head of finance Douglas Matthew said extra cash generated under the scheme would be channelled back into training grants.

He said: "CITB-ConstructionSkills levy is used to help us support industry by providing funding for training. However, we have to spend a significant amount on recovering payments.

"This money could be better used for funding industry training, and any savings will be ploughed back into the CITB-ConstructionSkills Grant Scheme.

"We hope this measure will encourage employers to sign-up to direct debits so that they do not end up missing payment deadlines and incurring the interest payments."

The levy is currently charged on those whose wage bill is more than £76,000 a year.

It is charged at a rate of 0.5% on direct employment and 1.5% on labour-only subcontractor payments.

A ConstructionSkills spokeswoman said the levy was reviewed annually, but that there was no intention to change it in the current economic climate.

This year, the threshold rose from £73,000, having increased from £69,000 the previous year.

Matthew said a record amount of £170m was available in grants this year to help construction firms fund training.