TaxCorporate TaxRecruiters condemn ‘tax on jobs’

Recruiters condemn 'tax on jobs'

Government ministers have been vilified by recruitment companies for going ahead with the planned changes in VAT, making it more expensive to hire temp workers

Chief executives from some of the largest recruitment firms have labelled a
change in VAT as a ‘tax on jobs’.

The changes are set to be introduced in April, and are expected to increase
the cost of hiring temporary workers in the insurance, banking, education,
charity and healthcare sectors more expensive, the chief executives said in a
letter published in the Financial Times.

The recruiters are calling for the changes to be pushed back to 2011 when the
jobs market is expected to have recovered.

In the 2007 Budget, Chancellor Alistair Darling said there would be a
withdrawal of the staff hire concession, which allowed for companies to pay VAT
on agency fees as opposed to the wages of temporary staff, the FT said.

Kevin Green, chief executive of the Recruitment & Employment
Confederation, said in imposing the VAT change, the government is ‘giving with
one hand and taking with the other.’

‘Last week’s jobs summit promised to get more people back in work but if the
VAT costs on temporary care workers, lecturers and financial analysts soar in
April, job cuts will have to be made,’ he said.

Further Reading:

Treasury
defiant on staff hire concessions removal

Insurers
call on Treasury over temp VAT

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