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Anger at no movement on the VAT staff hire concession - jobs still at risk says REC

In response to the Chancellor’s Pre-Budget Report, Kevin Green, the REC’s Chief Executive has expressed disappointment that the Chancellor has not acted to remove the VAT staff hire concession. 

“We are deeply disappointed that the Chancellor has not moved on the decision to remove the VAT Staff Hire Concession from 1st April 2009. This one single measure could help retain 150,000 temporary jobs in the medical, financial and third sectors. 

"The REC will continue to campaign for a delay during the current economic turmoil.  A delay would also allow the Treasury time to review how the cost of this measure can be mitigated against. 

“However, the REC welcomes measures to assist small businesses announced in the Pre-Budget Report.  The recruitment industry is dominated by small firms who are working twice as hard to keep people in work in the current climate.  We will work with Government to ensure that our recruitment agency members can access this funding and continue to move people into new jobs.  

 “We are pleased to note that the Treasury has decided not to change the current regime for tax relief for travel expenses for temporary workers and to focus on tightening up compliance.  The REC had called on HMRC to focus on misuse of travel dispensations schemes rather than withdraw access to tax relief altogether.  We will continue to work with the Treasury and HMRC to improve compliance on this matter.”  

Additional:

Over the last week REC has written to Treasury and Department for Business Ministers on this matter.  The need to delay the withdrawal of the concession was also highlighted in the CBI’s submission to the Prime Minister before the Pre-budget Report. 

Whilst it is clear that the Government does not wish to give ground on this matter, we will continue to campaign to move back the removal of the concession in the current economic climate.  In order to create even more noise around this campaign we are calling on members and their clients to write to their local MP outlining the impact this change will have. 

 A briefing on this matter and model documents are available in the VAT Action Zone: http://www.rec.uk.com/about-recruitment/externalrelations/nationalcampaigns/taxation/VAT_Action_Zone