Contractor loses £22k appeal over ‘failing’ CITB levy system

A contractor has been ordered to pay almost £22,000 after it lost its appeal against paying the Construction Industry Training Board’s (CITB) levy.

Surrey-based MJL Construction Associates took the CITB to an employment tribunal in Bury St Edmunds last November to dispute paying levies due for 2021 and 2022.

According to a judgment in the case, published last week, MJL director Leslie Blay had argued against paying the fee on the grounds that there was “a lack of face-to-face apprenticeship training courses”, while questioning “the standard of them, the distance to the nearest one and a perceived lack of support”.

He also disputed whether he had been assessed correctly, as he felt the subcontractors he used, who were also registered with the CITB, should be responsible in their own right for paying it.

Blay accepted his only legitimate reason for appeal was the CITB’s assessment of his firm, but he told the tribunal that “he wanted to complain about the system” and believed it was failing.

All firms with employees who spend more than half of their time on construction activities are required to pay the CITB levy, which funds training development in the industry, particularly for smaller firms.

Contractors are also liable to pay the levy in respect of contract payments to “net paid” subcontractors.

However, Blay told the tribunal that his company should not be paying a levy in respect of “bona fide subcontractors” and said they “should be paying it themselves as they were employers employing their own employees”. He urged the CITB to recoup the fees from them.

Blay also claimed that knowledge of the levy was “patchy” and told the tribunal companies that should be paying were not doing so, which was leading to other firms paying more.

The CITB’s representative admitted there was “no obligation” on construction employers to declare their eligibility, but said it did have 74,000 firms registered.

The training body said it was carrying out research to identify which companies met the criteria and should be registered.

“It was clear from the legislation that the appellant was obliged to pay the levy in respect of net-paid bona fide contractors,” Judge Samantha Moore said.

“In that respect it was not a question of the appellant paying the levy on behalf of those contractors because in many cases they should also be paying a levy themselves.”

Moore understood Blay’s complaints about the unfairness of the system, but said “this is not an argument that can have any traction in this jurisdiction”.

The judge ruled that MJL had been correctly assessed and ordered it to pay £21,913.27.

Commenting on the case, a CITB spokesperson said: “MJL Construction Associates Ltd exercised its statutory right to appeal against the 2021 and 2022 levy assessments.