ARC calls for government policy change on agency tax and employment relations
The Association of Recruitment Consultancies (ARC) published its blueprint for modernisation and change in government policy on agency tax and employment relations. Included in ARC’s manifesto Post Brexit: a better place for doing business, the Association calls upon the government to:
- Adopt a single, positive, overarching policy towards the recruitment sector;
- Scrap antiquated tests in the agency tax rules and implement a tax payment policy based on supply as the common factor;
- Create a tax relief policy for all agency workers;
- Implement a joined up tax approach; and
- Remove the ability for an agency worker to claim employment rights against a hirer.
Speaking about the manifesto, Adrian Marlowe, chairman of ARC, said, “We can do nothing about the uncertainty or the eventual outcome from Brexit, but whilst there is an air of change, let’s take the opportunity to present a strong vision that addresses long standing issues. The UK recruitment supply sector can be more efficient if you remove unnecessary administration and risk, particularly in the areas of tax and employment relations. It’s time government treated our industry as an asset that it can showcase to the world. Nothing can be more appealing than for it to adopt a single cohesive positive policy across all departments that emphasises that we do business better in the UK.
“I believe the government should distance itself from old tried and failed methods, such as the reliance on the outdated, outmoded test of direction, supervision or control which simply cause confusion. This requires modernisation and a new mindset. For example the current approach to tax, including new proposed IR35 rules, which places liability and administration on the agencies, is wholly counter- productive. The scrapping of home to workplace travel tax relief should also be reviewed and the conflict which arises when an agency worker has rights under the Agency Workers Regulations and employment rights against a hirer should be resolved. Our suggestion would not only streamline processes for agencies and HMRC but should achieve the double benefit of supporting the industry whilst fully addressing the government’s concerns over tax avoidance.
“In today’s post-Brexit environment there is a need to strengthen the appeal of recruitment business and flexible working and explain how simplification, modernisation and joined up thinking can bring significant rewards, enhancing the appeal of post Brexit UK.”