The appellant has been trading for more than 20 years selling wooden products, mostly bespoke wooden overlay flooring. The company does not participate in the HMRC scheme for the construction industry.

In 2015, the respondent identified the company as (potentially) falling within the scope of the ‘Construction Industry Training Levy’ and the appellant challenged this. The question of whether a business is considered a ‘construction establishment’ as per the Department’s Orders is whether the establishment is engaged wholly or mainly in the construction industry for twenty seven or more weeks in the year.

The tribunal focused on whether the company’s work fell within the scope of “all operations in the … alteration of a building (or part of a building)” as outlined by the Order. Despite the company arguing that its flooring was predominantly ‘decorative in nature’, the tribunal considered that the laying of the wooden overlay flooring is an example of re-decoration. The company was deemed liable to pay the construction industry training levy in respect of its production operations.

Practical Lessons

The Construction Industry Training Levy funds various products and services and is aimed at encouraging training within the construction industry. However, the tribunal in this case openly criticised the failure to update the originating legislation (the Construction Board Order 1964) which created the levy. The tribunal noted that the Order’s language ‘has not kept pace with technological and other developments in the construction industry.’

This case demonstrates how widely the levy can apply - even where the operations of a business are concerned with very minor alterations to buildings, such as the manufacture of windows. In the current political climate, however, legislative change looks extremely unlikely.
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