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Winning prescription served up for recruiters and their clients through innovative VAT reduction By David Thornhill, MD of Simplicity

Winning prescription served up for recruiters and their clients through innovative VAT reduction

By David Thornhill, MD of Simplicity

When you come to think of it, a volatile jobs market produces losers and winners each and every day. Thats what keeps the wheels of recruitment turning.

But for some specialist recruiters the niche locum market has proved to be a tempting pool in which to fish; matching the best in class doctor, vet, lawyer, accountant or teacher to act as the place holder or locum tenens (in Latin) for the incumbent. However many recruiters and clients are missing a trick on how to dramatically reduce their VAT burden and produce a win-win for both parties.

But, to illustrate my point, lets just focus here on the health sector. The NHS is in an unenviable yet well publicised Catch-22 position. On one hand it needs to provide the best possible care to its patients but on the other hand this has to be achieved with a budget thats stretched more than ever. This essentially leaves bosses in difficult position regarding how to make the most of the funding they receive from the Department of Health. There are stories almost every day in the media reporting on the latest service being shut down, highlighting the pressures healthcare providers face on a daily basis.

This pressure filters throughout the supply chain, affecting staff and suppliers including recruitment agencies who also face such funding restrictions.

A report was published last year which found the NHS is the fifth largest employer in the world with 1.7 million employees; in case you are wondering, the US Department of Defence came in first with 3.2 million employees, (to help put this into perspective) followed closely by the Chinese Army and McDonalds. Clearly employing this many workers mean the NHS faces huge recruitment costs, including locums, but there are options that are specifically designed to help healthcare providers to stretch their limited budgets.

There are roughly 3,500 locum doctors working in NHS hospitals every day, plus more than 15,000 standing in for your local GP; as a result, in just two years, locums cost the NHS the unhealthy sum of more than 2 billion![1] Across the UK, approximately 50 recruitment agencies provide the health service with locums and from these agencies, roughly 80 per cent of all vacancies are filled.

This doesnt mean, however, that the healthcare sector has to be in a meltdown over its recruitment costs.

At Simplicity, we realised that some of our products are perfectly placed to help agencies who supply interim staff to healthcare organisations. Armed with innovative solutions we have made inroads into supporting the medical recruitment sector.

If youre supplying any locum staff and charging VAT, that makes you a perfect candidate for vatsimply. Did we also mention it can be FREEto recruitment agencies?!

vatsimply can help to reduce your clients unrecoverable VAT burden by up to 80%. But the real beauty of vatsimply is that it has the potential to help both the agencies who provide the locums, of which there are around 50 at present working within the healthcare sector, but also allows the client to importantly save money by stretching their budgets further. This happens by working together, something which doesnt happen enough these days.

The recruitment agency will find the locum doctors and deal with the necessary admin; we will then agree with the client a system by which we can pay those doctors for them. And the only invoices we send them relate to payroll and admin services.

Nowadays, especially in the healthcare industry, the aim is reduce expenditure as much as possible without affecting the level of care provided; sadly this is not always possible. Were all familiar with the Governments struggle to cut back the budget deficit and this means some public services are under intense pressure to deliver cut and maintain service levels.

I have many friends over in the States and they are in awe of our NHS; free healthcare at point of need is a gold standard recognised worldwide and is something to be proud of, as spotlighted in the 2012 Olympics Opening Ceremony, if in a slightly strange way!

We created vatsimply to help clients reduce their overall recruitment costs by more than 10 per cent; money which in this example could be put back into providing better care for patients. vatsimply is structured so that agencies who use it can benefit from using it free of charge.

So the moral of this story; you can have altruistic reasons and be a profitable business. No moral dilemma there!

For more information on how we could help your recruitment agency or hospital, visit or call 01594 546585.


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