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REC flags need for clarity and consistency on taxation rules with HM Treasury

The REC has been in contact with HM Treasury to flag a number of ongoing taxation concerns for the UK recruitment industry. These include the need for consistent and effective enforcement of rules surrounding travel dispensation schemes and ensuring that personal taxation rules facilitate flexible working patterns that are crucial to employers and workers.

Our latest submission to the Treasury underlines the urgent need for clarity and consistency in the way that taxation rules are applied to the recruitment sector – particularly with regards to travel dispensation schemes. Our overriding aim is to ensure that there is a level playing field for our members to operate in. Despite the ongoing squeeze on resources we believe that it is crucial for HMRC to make a step-change in its enforcement activities.

On other taxation issues, we are continuing to engage with HMRC on improving implementation of IR35 rules for self-employed contractors. One major concern surrounds proposals for moving all ‘controlling persons’ onto the payroll (as employees) which would undermine our economy’s valuable labour market flexibility. Our message to government is that the key to successfully using contractors and interims lies in sound management of contracts and staff, rather than restrictive, one-size-fits-all regulation.

A priority for the REC is to work constructively with HMRC to ensure a fair and consistent market for jobs and business and to protect crucial flexibility within our labour market. Members will be kept up to date with all developments and with the feedback from HM Treasury.