IR35 and Apprenticeship Levy - Industry must speak with one voice, says ARC
“One message, one voice, new supportive legislation” was the key message from Adrian Marlowe, chairman of the Association of Recruitment Consultancies (ARC), at its IR35 and Apprenticeship Levy conference last Thursday.
Calling for all recruitment businesses to support ARC’s campaigns for modernisation and a new joined up positive policy by government towards the sector, Marlowe said, “All staffing and contractor supply businesses have the same need for a long term supportive legislative platform that allows flexibility and recognises the socio economic benefits that our important sector provides. All recruitment businesses therefore have a stake in achieving a better future without onerous administrative and tax requirements. Recruitment businesses should be willing to assert their common position. Fragmentation and lack of support from those with different interests can only undermine efforts for improvement.”
Referring to ARC’s Brexit Manifesto launched in autumn 2016, Marlowe stated, “Last year we set out our overriding campaign, a call for joined up thinking at government level and to modernise the tax rules for agencies in particular so that the UK can be a better place in which to do business for both local and foreign investors. It’s in our DNA to support staffing and contractor supply businesses – this focus ensures our message is not diluted.”
Marlowe’s call, to an audience that included some of the UK’s leading recruitment businesses, followed evidence from a specialist panel of recruiters that contractors in the public sector are already turning down jobs as a result of the proposed new IR35 rules, with the inevitable conclusion that public sector cost will increase exponentially. He commented, “This is simply madness at a time when the public sector is already fully stretched and expert staff is in short supply.”
Referring to comments at the conference made by Selman Ansari, a solicitor from the public sector law firm, Bindmans, retained by ARC, Marlowe explained, “The onus on agencies to determine IR35 tax status appears to be an unsuitable hammer to crack the HMRC nut, and the online tool seems to conflict with general legal principles. These fundamental legal issues need to be challenged.
“We believe that no stone should be left unturned. Our lawyers advise that this should be pursued urgently and on a show of hands 100% of attendees agreed.”
Experts from EEF and Key Training spoke on the Apprenticeship Levy indicating amongst other things, that there is little opportunity for agencies to use the Levy in any meaningful way. Marlow said, “We agree with the principles of the levy but the way it affects agencies and excludes agency workers does not seem fair.
“Amounting to little more than a straightforward tax.”
Marlowe’s message was echoed by Mark Bull, CEO of Randstad UK and Middle East, who stated, “The recruitment industry needs to speak with one voice if it’s to get us at the government table and shape legislation”. Following the recent take up by Randstad of ARC membership, Bull added, “We joined ARC because of its more assertive legal stance.”
Marlowe concluded, “There is no joined up approach at government level. The result is that we see complaint and criticism as the lead story, and the legislative approach then follows. As we call for joined up thinking in government, we ourselves must all work together to get the right outcome. This requires a single, determined, cohesive voice which ARC can provide with your support.”