They say that today’s kids are tomorrow’s dreams. This couldn’t be more true of the construction industry. As the economic climate glooms the need for a fresh and young workforce to come through and thrive in the industry is mightily important. One instrumental piece of law for this side industry is the Levy.
The Levy scheme was introduced in the 1960s to provide the construction industry with financial backing to help with:
- Grants for training.
- Sustaining high standards in the construction industry.
- Sharing the costs for training and development.
- Creating an industry recognised card scheme – like the CSCS card scheme.
- Maintaining a positive positive image of the construction industry.
There is a shortage of young workers currently, making the Levy’s role increasingly strong in bringing young workers into the industry. The Levy aids, amongst other things, apprenticeship schemes which, by many, are seen as the future as well as bridging the gap between older and younger workers.
Currently, one in five employers are taking on new apprentices as the scheme is ideal for both parties. The apprentice is learning new skills and the employer is paying very little money for valuable help.
Employers can also apply for grants funded by the Levy, as long as they’re registered with CITB-Construction Skills. This enables their employees to gain industry qualifications within the credit framework such as NVQs to help them progress in their trade.
Who does the Levy apply to?
The Levy, despite being modified over time, remains largely the same since its inception in the 1960s, here’s how it works:
• Those who have a wage bill less than £80,000 are not liable to pay the Levy but still have to fill in a Levy Return.
• Employer’s wage bill which exceeds £80,000 but is less than £100,000 – qualify for the Small Business Levy Reduction.
What’s the Small Business Levy Reduction?
The Small Business Levy Reduction was created to help those businesses that total wage bill falls between £80,000 and £100,000. Under this system, the employer gets a 50% reduction on the total amount of Levy they would’ve had to pay. For example:
• So the Levy for your payroll employees is 0.5% of £45,000 (£225), plus, 1.5% of £45,000 (£675) which comes to £900.
• 50% of £900 is £450 – the total Levy you have to pay under the Small Business Levy Reduction.
How does the Levy Return work?
You’ll be asked to fill out a Levy Return every April. Your business will be assessed on your wage bill from the previous financial year as well as a look at your workforce. You can do this online.