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Emergency Budget - VAT cost increases can be avoided.

Emergency Budget - VAT cost increases can be avoided.
The emergency budget on the 22nd June is predicted to move VAT on services up from 17.5% to around 20% or more, similar to the Irish model says David Thornhill, Managing Director of Cash Simply.
For those clients who cannot reclaim VAT, this will mean another  cost increase on top of the one they suffered last year of around 12% for all the temporary labour they use after the removal of the Staff Hire Concession. The reversal of the temporary reduction to 15% did not help them either.
The proposed cost increase can be avoided by using VATPAY, which arranges for workers to be engaged in a short term hire with the client but for everything else to be outsourced including the legal contracts of employment.
Agencies will probably need to hold your clients hand through the process as it is complex contractually. However, it is very simple to apply the VATPAY processes which mean that VAT is lawfully charged on the employment agencies services but not the cost of workers wages.

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