Employers must declare the total number of full and part-time employees working in Great Britain during the year ending 5 April, and the total annual labour payments made. Total annual labour payments include all salaries, fees, wages, bonus and incentive payments, payments to trainees, taxable redundancy payments, statutory sick and maternity payments that appear on P60s, allowances (such as travel and accommodation allowances which are paid as part of salaries or wages) and any gratuities or other profits or incidental benefits of any kind obtained by an employee other than pension contributions. The information needed can normally be found in your PAYE tax deduction cards (P11 deduction working sheets or P14 end of year summary sheets).
Employers must also declare all full and part-time persons working under labour-only agreements or arrangements and the payments made in respect of the year ending 5 April, provided that such individuals were mainly working in Great Britain.
Labour-only contractors are individuals working for contractors where labour is more than 50% of the cost of the agreement. Labour-only contractors can include contracted, sub-contracted or self-employed workers if they are under the control or direction of your employer, either directly or indirectly. Project work where the contractor organises its own management and resources and ensures that then project requirements are met may not be labour-only. This depends if your employer has control and direction over the workers.
For labour-only payments, all other costs, such as materials and equipment, should be removed. VAT added to payments under labour-only agreements should not be included in your declaration. The information required to complete the declaration can normally be found in an employer’s purchase ledger records. A fuller explanation relating to labour-only contractors and arrangements may be found in the ECITB’s Levy Guidance Notes (see below).
To ensure that levy is not paid twice for the same workers, if an employer hires out its workers to for other engineering construction employers in Great Britain, the payments received (labour-only receipts) will be taken into account when calculating the amount of levy due. Employers wishing to declare any labour-only receipts should contact the ECITB’s levy team for a labour-only receipts declaration form.