Recruitment consultancies set up during 2005 will be subject to a new national Customs & Excise directive that will have a severe impact on cash flow as well as exacerbating levels of paperwork and administrative tasks.
New consultancies will now be required to file tax returns on a monthly basis instead of the quarterly norm. Other industries will not be affected by the changes.
This move follows the introduction of the Enterprise Act in 2003 whereby the Crown lost its preferential status leading to increased losses for them in the last year.
ìThis change is primarily intended to protect Customs & Excise from missing out when agencies go bankrupt,î said Brian Pursey, managing director at Oriel Support. ìIt is yet another barrier for start-ups, but there are ways to minimise or eliminate its impact. If agencies use a back office support provider that also grants finance, they may well find that the PAYE and VAT are taken care of by the outsourcer. This also has the advantage of minimising the risk of business failure ñ most insolvencies stem from an inability to pay the Crown debt.
ìAnybody thinking of setting up a recruitment consultancy in the coming year should take professional advice,î Brian concluded.
Customs and Excise Directive Will Hit Start-Ups Hard warns Oriel Support
Recruitment consultancies set up during 2005 will be subject to a new national Customs & Excise directive that will have a severe impact on cash flow as well as exacerbating levels of paperwork and administrative tasks
