Issue 117 - 29th June - 27th July
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REC urges HMRC to review increased tax burden on temporary jobs02/10/2008 10:41:00An estimate by the Recruitment & Employment Confederation (REC) – the representative body for UK recruitment agencies - is that removing this concession will add £400 million to employers’ costs and could ultimately result in thousands of temporary job opportunities being lost. Commenting on the issue, REC Chief Executive, Kevin Green says: “The net result of having to add VAT to the overall cost of taking on temporary and contract workers is likely to be less flexibility, higher costs for UK businesses and fewer jobs available. We are looking for constructive discussions on how we can avoid the fallout from the added costs that the removal of this concession will lead to, at a time when the UK economy can least afford it.” The removal of the concession will have an impact in sectors which are not able to reclaim the VAT that will be charged on the wages of temporary staff from April 2009. Specific examples include: • Health care sector: costs will soar as VAT is charged on the wages of locum doctors and specialist medical staff supplied through agencies • Charities: one charity has estimated the cost at £1.6 million a year • Social Housing: it is estimated that the cost to the sector could be £135 million • Further education: the annual cost to English Colleges could be £20 million • Financial services sector: the cost to investment banks is estimated at £50 million and in the retail banking sector over 25,000 jobs are caught up in temporary staffing. In the current economic uncertainty, is now the time to raise the cost of staffing in the financial services sector? onrec.com news can only be reproduced with the permission of onrec.com or if onrec.com is attributed as the source.
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