The Construction Industry Training Board (CITB) is an industrial training board responsible for promoting vocational training in the construction industry. It is empowered by statute to impose a levy on employers or contractors in the industry to fund its operations.

Many contractors seek to recoup this from their subcontractors in the form of a deduction made from the ‘Gross amount of payment’ shown on a contractors monthly return. Historically we have accepted this practice and included it in our guidance; however, CIS Legislation now requires a change to this calculation.

You should note that from the effective date, the value of your subcontractor’s supply for VAT purposes is not reduced by CITB levy deductions. Additionally, if you use payroll software for CIS, you need to ensure this is reflected in any new updates.

The change is effective from 6 April 2014.

Further information about the CITB levy is available on the CITB website.

The calculation of the CITB Levy and therefore the amount that needs to be withheld from a payment to a CIS supplier has changed so that if you deduct a CITB Levy on the payment to the sub-contractor, you must deduct it after VAT has been charged.

Previously, when Dimensions calculated the Payment Due value for CIS when raising a Purchase Remittance, the CITB Levy was used in the calculation of the Tax Withheld value, which then affected the Payment Due. However, the CITB Levy should not be applied to the Tax Withheld.

For example -
Where the Invoice total is 1,000.00 + VAT = 1,200.00, and CITB Levy is 0.5%:
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Previously, the system would calculate: CITB Levy = 1,000.00 * 0.5% = 5.00, Tax Withheld = (1000 – 5) * 20% = 199.00, therefore Payment Due = 1200.00 – (5.00 + 199.00) = 996.00).
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Now the system calculates: CITB Levy = 1,000.00 * 0.5% = 5.00, Tax Withheld = 200.00, therefore Payment Due = 1200.00 – (5.00 + 200.00) = 995.00).

These changes are reflected throughout the software once enabled in System CIS Company Defaults.

The CITB Levy changes include updates to three ACD Remittance documents, and the ACR Statement of Payments report. The new versions are installed to the standard location in your Dimensions installation folder. If you hold ACD and ACR reports in a different location (for example, centrally on a server), then you will have to copy the installed versions to the correct location. In addition, if you have customised versions of any of these reports, the customisations will need applying again to the new reports. If you do not use the CIS module, or do not apply the CITB Levy, then the new reports are not required.

Please note that the themed versions of the ACD reports have not been updated with this change. These can be provided if required – please contact support with your request.

System > [Settings] Options > CIS Subcontractors Options: Company Defaults tab

This option allows you to decide whether to apply the levy to Tax Withheld; the default is unchecked. When enabled, the following will not include the CITB Levy percentage in the calculation of Tax Withheld, in order that you are compliant with legislation:

• CIS Subcontractor Summary that is opened from a PL Invoice/Credit Note Detail Line

• CIS Subcontractor Summary that is opened from a POP Invoice/Credit Note Detail Line

• Remittances

• Statement of Payments

• CIS300 Report

• CIS Subcontractors' Invoice Authorisation

Purchase Transaction Enquiry [right-click menu]

Where an invoice has been paid, the ‘Subcontractor Summary’ right-click option has been removed to avoid displaying misleading/incorrect information; it has been re-located to the relevant payment.

The “Payment Due” label has been changed to “Payment Value” to avoid confusion.

Where the CIS Subcontractor Summary is opened from a Payment, then the Surveyor and Authorisation fields are not shown; rather, the fields have been added to the Transaction Header Supplementary Info tab for the invoice.