Two thirds of recruitment agencies believe that the introduction of an accreditation scheme for accountancy service providers would enable them to establish or reinstate a preferred suppliersí list (PSL).
According to a survey recently carried out among senior agency management by JSA, one of the UKís leading specialist accountants for contractors, two thirds of technical agencies no longer operate a PSL for fear of being caught up in the recent managed service legislation and ancillary transfer of debt provisions. Half the respondents also said that the legislation has had a negative financial impact on their business.
All the agencies that responded to the survey said that they would support HMRCís suggested Audit provisions, while 77% of respondents believed that the current managed services legislation is forcing some of their contractors into umbrella companies when other options may be more suitable. Despite this, only 21% of respondents thought that this was having an inflationary effect on hourly rates demanded by contractors,
Perhaps more worryingly, nearly 50% of respondents expressed concern that some of their contractors were falling into potentially illegal tax schemes as a result of the new legislation and the consequential fear for agencies imposing a strict PSL.
Barry Roback, Chief Executive of JSA said: ìThe results of this questionnaire demonstrate only too clearly the unintended consequence of the recent managed service legislation. The vital link between agencies, contractors and accountancy service providers has been temporarily severed and it is going to need a lot of persuasion and firm guidelines from HMRC before agencies are once again prepared to return to PSLs.î
Agencies say that accreditation scheme would help them to reinstate PSLs
Two thirds of recruitment agencies believe that the introduction of an accreditation scheme for accountancy service providers would enable them to establish or reinstate a preferred suppliersí list (PSL).
