CITB Levy Returns Explained: What Every Construction Business Should Know

September 29, 2025

Running a construction business is no small task. Between juggling projects, managing subcontractors, and keeping up with regulations, it can feel like paperwork never ends. One of the most important (and often misunderstood) obligations for UK construction firms is the CITB Levy Return.
Whether you’re a sole trader, small building company, or a growing contractor with employees, understanding your CITB Levy Return responsibilities is essential. Done correctly, it keeps you compliant and even opens up access to valuable training grants. Done incorrectly or worse, ignored and you could face penalties.
At Brickbooks and Payroll Ltd, we specialise in accountancy for the trades and construction industry. With over 15 years of experience, our Bedfordshire-based team helps businesses across the UK stay compliant, save time, and alleviate the stress of complex administrative tasks, such as CITB Levy Returns.
In this blog, we’ll walk you through what the CITB Levy is, who it applies to, how it’s calculated, and why it matters to your business.

What Is the CITB Levy?
The CITB (Construction Industry Training Board) Levy is a tax applied to UK construction businesses to fund skills and training in the industry. The money collected is reinvested in programs that support apprenticeships, training courses, and workforce development, essentially ensuring the future strength of the construction sector.
In short, you pay in, and the industry benefits. Better yet, if you play your cards right, you can claim some of that investment back through CITB grants.

Who Needs to Complete CITB Levy Returns?
The answer is simple: every construction business must submit a CITB Levy Return even if you don’t owe a penny.
Employers with a wage bill above the threshold will pay the levy.
Smaller businesses may fall below the threshold, but must still complete the return.
Labour-only subcontractors often contribute to your levy calculation, meaning many businesses are caught off guard if they don’t maintain accurate records.
Ignoring your CITB Levy Return isn’t an option. If you fail to submit it, you risk penalties and miss out on grants you could use to upskill your workforce.

How Is the CITB Levy Calculated?
The levy is based on your total wage bill, which includes employees on PAYE and some categories of subcontractors.
The rates currently stand at:
0.35% on all PAYE staff wages.
1.25% on net payments made to labour-only subcontractors.
For example:
A company with £200,000 in PAYE wages would pay £700 in levy.
If they also paid £50,000 to labour-only subcontractors, they’d pay an additional £625.
Accurate payroll and subcontractor reporting are vital. Get it wrong, and you could be overpaying or underpaying. Neither is ideal.
Why CITB Levy Returns Matter
Submitting your levy return isn’t just about ticking a compliance box. Done correctly, it can bring real advantages to your construction business:
Access to funding – CITB grants help you invest in apprenticeships, qualifications, and training.
Stronger workforce – More training means better-skilled staff and fewer costly mistakes on site.
Peace of mind – Avoid fines, penalties, and HMRC headaches by staying compliant.
Fair contribution – You’ll only pay what you owe, not a penny more.
Think of it this way: the levy isn’t just a financial outlay, it’s also a door to investing in your people.

Common Challenges Construction Firms Face
We know from experience that many contractors find the CITB Levy Return process frustrating. Some common challenges include:
Confusion about which subcontractors should be included.
Struggling to keep payroll and CIS records accurate.
Forgetting deadlines (because paperwork is never top of the site to-do list).
Missing out on reclaiming training grants.
This is precisely why outsourcing your levy return to an expert accountancy firm like Brickbooks and Payroll makes sense. We deal with the details while you focus on building.
How Brickbooks and Payroll Can Help You With CITB Levy Returns
At Brickbooks and Payroll Ltd, we’re specialists in accountancy for the construction sector. We are familiar with the ins and outs of CIS, VAT Domestic Reverse Charge, payroll, and CITB Levy Returns.
Here’s what we do for our clients:
Work out whether you owe the levy (and how much).
Prepare and file your CITB Levy Return accurately and on time.
Ensure payroll and CIS data are accurate and up-to-date, so there are no surprises.
Help you access CITB grants to support staff training.
Provide ongoing advice to make sure you’re always one step ahead of compliance.
We utilise industry-leading software, including QuickBooks, Xero, and FreshPay, to streamline the process. The result? No stress, no late penalties, and more time for you to focus on the job site.

FAQs About CITB Levy Returns
Do I need to pay the CITB Levy if I only use subcontractors?
Yes. Labour-only subcontractors are included in the calculation. Payments to them are subject to the levy at 1.25%.
What happens if I don’t submit my CITB Levy Return?
Failure to file can result in penalties, interest charges, and loss of access to grants. It’s simply not worth ignoring.
Can small construction businesses avoid the levy?
If your wage bill is below the threshold, you won’t pay, but you still need to submit the return.
How can I claim grants from CITB?
Once you’re registered and up to date with returns, you can apply for funding for training, apprenticeships, and qualifications.
Can an accountant handle my CITB Levy Returns for me?
Absolutely. At Brickbooks and Payroll, we handle the process end-to-end, ensuring accuracy and saving you time.
Is the levy the same as CIS deductions?
No. CIS is about tax deductions for subcontractors, while the CITB Levy is a training contribution. Many construction businesses deal with both.

Final Thoughts
The CITB Levy is one of those obligations that can feel like yet another layer of admin. However, it’s not all bad news; it also unlocks funding and training opportunities that can help your business thrive and grow. The key is to get it right, on time, every time.
At Brickbooks and Payroll Ltd, we take the complexity out of CITB Levy Returns. With over 15 years of experience supporting trades and construction businesses across the UK, our friendly team ensures you stay compliant, save time, and never miss an opportunity to strengthen your workforce.

Simplifying CITB Levy Returns for Your Business
If you’re struggling with your CITB Levy Return or want peace of mind knowing it’s handled correctly, we’re here to help. At Brickbooks and Payroll Ltd, we specialise in accountancy services tailored for the trades and construction industry, covering payroll, CIS, VAT, bookkeeping, and compliance support.
Contact our friendly team today to discover how we can support your business. You can contact us by calling 01234 413751 or emailing info@brickbooksandpayroll.com. We are based in Bedfordshire but proudly serve construction businesses nationwide.
Free yourself from financial stress; let us handle the paperwork while you focus on building success.