Anne Corder Recruitment joins forces
Anne Corder Recruitment joins forces with charities to fight VAT changes
Independent agency Anne Corder Recruitment is joining forces with charities to lobby the Government over a move to increase the tax burden on hiring temporary staff.
The agency fears the introduction of VAT on an extra tier of costs could mean charities are left short-handed and temporary contracts are not renewed. It will also mean an increased administrative burden.
ACR consultant Karen Dykes has been in consultation with Peterborough MP Stewart Jackson in a bid to get the decision to withdraw the concession on April 1 reversed. The government is standing firm, insisting that the concession has to be removed to stay in line with UK and EU VAT laws.
We have been talking to some of the major Peterborough-based charities which we work with to brief them on the changes for some time, said Karen.
From April, the VAT staff hire concession will be removed meaning charities and the care sector will have to pay VAT on the wages of temporary staff as well as the agency fee which is the only one they have paid until now.
The Recruitment and Employment Confederation (REC), which Anne Corder Recruitment is closely involved with, estimates 150,000 temporary jobs nationwide could be affected by the change.
Charities which rely on temporary staff may find it impossible to justify the extra cost and so cut the amount of temps they use which, ultimately, could have a knock on effect to their work, said Karen Dykes. That is also going to lead to a rise in unemployment - at a time when that figure has topped two million the highest in 12 years.
It is in the interests of the economy that every incentive is offered by the Government to ensure the labour market is not damaged further by this tax on jobs.
A letter from the Treasury forwarded to Anne Corder Recruitment by Mr Jackson says: The Government recognises the charity sector will be affected by the withdrawal of the concession but, as there is no legal basis for the concession, retaining it for any sector would risk legal challenge..the Government cannot guarantee to insulate charities from wider tax changes.
A spokesman for Kidney Research UK, which engages temporary staff through ACR said: Charities need all the help they can get and the removal of this concession, which has been in place for 12 years, is going to create an extra financial burden which we can ill afford.
ACR has been working closely with us to ensure we have the necessary strategies in place to deal with the change in the law at the beginning of April but ultimately we would ask the Government to rethink the policy.