15 Apr 2011
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Victory for firm in fight against paying training levy

A lawyer representing a firm who successfully appealed against paying the construction training levy is predicting that the outcome will encourage other companies to fight against paying the annual charge.

The levy is applied to all liable employers by the CITB-Construction Skills, based on their size. However the legislation defining the types of businesses that are legally obliged to pay the levy, is far from clear cut said Stuart Thwaites, a senior associate at Midlands law firm, Wright Hassall.

Wright Hassall lodged an appeal on behalf of a multi-national client which supplies and installs shelving and display furniture for supermarkets as they felt its operations fell outside the definition and objected to paying the levy.

The client, who does not want to be identified, had been asked to pay £85,000 per annum.

“This is a very significant outcome because it demonstrates the extent to which there is a ‘grey area’ in the legislation that goes with this levy,” said Mr Thwaites.

“In the first instance this particular client was told they were not subject to the levy but a year later they were, leaving them with no option but either to pay the levy year on year, or appeal.

“We spent a year putting a number of submissions together in order to argue that the CITB should accept that this company is not subject to the levy.

“Everyone involved was delighted with the result as it will represent a major year-on-year saving.

“This is a very rare result and as this form of case is not generally published in law reports I think it is important that other businesses are made aware of this.”

“Main contractors and other businesses that are clearly involved in ‘constructing’ buildings and infrastructure would be hard pressed to argue against the levy,” added Mr Thwaites.

“But there are many ancillary businesses, particularly those in the interior fittings industry, where applying the definition is not so clear cut.

“Given the cost of paying the levy can run to many tens of thousands of pounds, any company that falls into this grey area would do well to consider challenging their obligation to pay.

"The CITB may have to prepare themselves for an increased number of appeals and the first thing they will need to do is to clear up the legislation and eliminate such grey areas, as well as ensuring that the assessment process is fair.”

CITB- Construction Skills played down the row. A spokesperson said:” It’ s a simple case. The company’s structure and operations changed and it no longer fell within the scope of having to pay the levy.”