TaxPersonal TaxVAT charge to hurt temp supply to key industries

VAT charge to hurt temp supply to key industries

Recruitment industry warns that adding VAT to temporary staff wages will cost key industries far more than government estimates

Plans to add VAT to the wages of temporary social care and charity workers,
locum doctors and financial services staff will lead to a significant fall in
the use of agency staff, according to a new study.

The Recruitment Employers
Confederation
has warned that the government has ‘grossly underestimated’
the costs involved.

The measures, which come into effect in April 2009 and scrap the concessions
to agencies providing temporary workers to industries with a zero rate of VAT,
should put £125m a year in the Treasury’s coffers. However, the REC has
estimated the cost to be at least £400m,
The
Telegraph
reports.

Further reading:

Scrapping
zero VAT rate will help poor families, says IFS

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