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APSCo gives cautious welcome to NIC Bill announced in the Queens speech

APSCo gives cautious welcome to NIC Bill announced in the Queen’s speech

Measures announced as part of the National Insurance Contributions (NICs) Bill in the Queen’s Speech today were given a cautious welcome by The Association of Professional Staffing Companies (APSCo). “While the measures may go some way to addressing problems with tax avoidance, we will need to see full details of the Bill before we can assess the full impact”, said Sam Hurley, Head of External Relations at APSCo. “However it does appear that the reduction in the cost of employer National Insurance Contributions – which will entitle every business to a &pound2000 employment allowance - will serve to support APSCo’s smaller members who aspire to grow and this is to be welcomed.”

“Reports of tax avoidance by employers and corporations have been controversial, with the suggestion that some employers are classifying workers as independent contractors in order to avoid paying taxes.  An extension of the General Anti-Abuse Rule to NICs and a strengthening of the legislation to prevent the use of offshore employment payroll companies to avoid employer NICs could be a step in the right direction, as long as it does not impact on those legitimately taking advantage of incentives in the tax system.”

“The problem is more common in the lower-paid, lower-skilled recruitment sector, where there are allegations of vulnerable workers being denied employment rights by being forced to work through personal service companies. Such deliberate abuses of tax rules are not a feature of the professional contracting market. Highly paid, highly skilled professionals use structures like personal service companies and umbrella companies for convenience and to take advantage of legitimate tax incentives.”

“We are calling on the Government to ensure that these measures, introduced in good faith to clamp down on unscrupulous practice at the more vulnerable end of the market, do not have a negative impact on this highly professional and low risk sector. The professional flexible recruitment market is vital to the health of the flexible labour market, which is itself an important facilitator of economic growth. It is crucial that the Government recognises this in its attempts to combat tax avoidance. “


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