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ARC comment on the Autumn Statement 2016

It is clear that many of the measures announced by the Chancellor today in his Autumn Statement will have some impact on the recruitment sector and on labour relations.

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The Association of Recruitment Consultancies - ARC

Ben Grover, External Policy Adviser for the Association of Recruitment Consultancies (ARC) said “As always, the devil will be in the detail and we shall comment further once legislation and guidance has been published and analysed.”

“On the basis of the scant detail within the announcement, a possible result for those operating in the public sector, is that the supply of personal service company contractors to such hirers may become a less attractive option due to the associated administration. At the same time, the charging costs of contractors in the sector may well increase to accommodate the removal of certain tax reliefs and allowances, particularly as the 5% tax-free allowance will no longer be available.”

The rationale for the removal of the top-slice is stated to be that those companies ‘will no longer bear the administrative burden of deciding whether the [IR35] rules apply’. Grover concluded “this gives a clear indication that the proposed new assessment methodologies will soon be available, and we will also assess these in due course.”